Arcadis, one of the leading design and consultancy firms, recently released their International Construction Costs report for 2016. This year the company has recalibrated their cost data to investigate the differences between building costs in 45 major cities around the world. The details take exchange rates into account as well as conditions in specific countries and cost differentials. From the data we can see which locations are the cheapest to build in, and which are the most expensive.
According to the data, New York is the most expensive city in the world to build in, and will remain so through 2016. There are several reasons for this, including high land prices, labour shortages and premium wage rates. A rise in insurance costs for builders has had an impact too; it can cost as much as 10% of the construction value to insure a new project.
Many people expected London to be the most expensive city in the world to build in, but it is second on the list largely thanks to stable material prices. The market in London is also facing an imbalance because contractors don’t have the capacity to satisfy the demand for new builds.
The rest of the top ten most expensive cities to build properties in features several high profile markets in Europe and Asia. China has two representatives on the list with Hong Kong (3rd) and Macau (5th). Mainland Europe has Geneva (4th), Copenhagen (6th), Stockholm (7th), Frankfurt (8th) and Paris (9th). The list is rounded out by global financial centre Singapore at number 10.
The list of the cheapest cities in the world to build in is interesting. All of the top ten cities can be found in either Asia or Eastern Europe. The top five are all Asian, including Taipei, Bangalore, Bangkok, Kuala Lumpur and Ho Chi Minh occupying the places. Europe holds the next four spots with Bucharest, Prague, Sarajevo and Sofia. The list is rounded out by Jakarta, the capital of Indonesia.
The Arcadis International Construction Costs 2016 report makes fascinating reading and can provide useful information for architects in London who are looking at the differences between markets around the world. You can view it on their website and find further information on the current financial conditions in various locations across the globe.