Dubai’s property market is in overdrive. Prices have surged 70 per cent in the past four years, and developers are racing to deliver amid record launches. But a new trend of bringing construction in-house is dividing opinion on whether it strengthens or destabilises the industry.
A handful of major developers have already embraced the model, citing tighter control over costs, timelines, and quality, while also capturing a larger share of profits. Yet industry voices warn it could complicate rather than simplify operations.
“Simply internalising construction doesn’t guarantee better quality,” said Abhishek Jalan, Chief Executive Officer of Grovy Developers. “What we can do better is establish an in-house quality control team that oversees final inspections before delivery.”
The shift comes as Dubai aims to double its population to 7.8 million by 2040. According to a report published by Reuters earlier this month, property launches surged 83 per cent in 2024 even as completions slipped 23 per cent amid intense competition for external contractors.
Jalan cautioned that the developer’s core role should remain in supervision and development, not contracting. “Though several big players have moved to in-house construction, many still avoid it because of the heavy financial and legal risks,” he said, noting that regional laws favour customers in disputes.
Risks, costs and opportunities
Hidden costs add another layer of complexity. Manpower is a major expense for in-house firms, Jalan explained. But he also sees a silver lining for smaller players. As large developers absorb construction in-house, independent contractors may lower prices to attract mid-tier developers, potentially correcting costs across the sector.
For buyers, the impact could cut both ways. “If well managed, in-house construction should lower prices. If mismanaged, overruns will eventually push costs onto customers,” Jalan said.
Despite the trend’s momentum, Jalan doubts its long-term viability. “If you look at any large development company, they don’t have in-house contracting. It exposes them to risks that outweigh the benefits,” he argued. Over the next two years, he expects prices to stabilise even as margins stay high, driven by Dubai’s booming demand. But whether in-house contracting remains part of the equation is still up for debate. (With inputs from Reuters)
