An international market survey of the construction market published by Turner & Townsend reveals that Hong Kong and Macau are Asia's most expensive construction markets to build this year.
Hong Kong was the ninth most expensive construction market globally, with an average cost of US$4,500 ($6,083) per square metre (psm). Macau took up 12th place with an average construction cost of US$4,269 psm.
Singapore’s construction market was relatively more moderate, clinching the 35th spot on the global list. Our average construction cost this year stands at about US$3,129 psm.
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The survey results from Turner & Townsend show that while the global construction industry still faces challenges, overall inflationary pressure is softening and stabilising costs, easing investment flow towards key global growth sectors such as data centres, healthcare, and manufacturing.
The report also indicated that a weaker Japanese Yen saw average construction prices in the country decline significantly this year. No Japanese cities were in the top ten list of most expensive construction markets in Asia.
Tokyo and Osaka are now the 13th and 17th most expensive markets to build at US$4,127 psm and US$3,985 psm, respectively. The report cites “strong global inflation, moderate post-pandemic economic growth, and a significant devaluation of the yen to a 34-year low, are key factors behind Japan’s lower overall construction costs this year.”
Most global markets tracked by Turner & Townsend indicate that a scarcity of skilled labour is the most significant factor driving up cost price inflation across the construction markets.
“Firms need to keep an eye on labour. Traditionally, Asian labour markets are known for high availability and low wages, but as demand grows for specialist construction such as advanced manufacture and data centres, there may be bottlenecks of high-skilled workers in these sectors,” says Sumit Mukherjee, head of real estate, Asia, at Turner & Townsend.