Customs duty waiver on cement continues to draw acclaim

Hailing the move as an auspicious beginning for keeping prices of building materials in check, UAE real estate developers and agencies said that the waiver is likely to gain momentum in the real estate market, considered to be the region's most flourishing in decades.

Mr. Ali Fakhruddin, Director of Fakhruddin Properties, one of the UAE's leading up-and-coming real estate developers, has welcomed the decision as being conducive to regaining confidence in property market. "The decision comes hot on the heels of other moves adopted by the government to safeguard the investment drive, the most important of which is the recently enacted Escrow Accounts Law."

"Dubai continues to dazzle the whole world with the great strides it is making in boosting its legislative and investment growth, while at the same time its impressive real estate boom is setting an example for countries all over the world," he added.

On the question of whether he expects additional similar moves to be implemented within the country's rapidly-growing property market, Fakhruddin, whose company is managing a series of signature developments in Dubai and Ajman, said, "We hope the waiver will affect other sectors feeding the property development market in the country, particularly the combustibles sector, which heavily contributes to increasing the operational costs of property projects."

Property analysts have attributed the rise in operational costs to government's failure to subsidize combustibles prices, which have increased by 42% in less than a year, imposing a considerable burden on real estate installations, especially cement factories, 30% of whose production relies on combustibles. The price hike also triggered a parallel rise in electricity prices and a concomitant hike in labour and production costs that eventually led to the current high inflation rates.