International Construction Market Survey Reveals US City As World's Most Expensive


Turner & Townsend have released the findings of their 2017 

International Construction Market Survey (ICMS)  an analysis of the average construction costs per square metre for both commercial and residential projects across all 43 regions and cities.
Survey Highlights

  • New York City has the highest construction costs, pushing Zurich off the top spot

  • Perth is the only city to experience a decrease in the costs of construction

  • Seven markets are identified as hot and two markets as overheating

  • 14 of the 43 markets covered in the survey are expected to grow in 2017 as confidence returns

  • Global construction costs are expected to increase by 3.5 per cent in 2017 after growing by 3.7 per cent in 2016

  • 56 per cent of the markets analysed are currently suffering from a skills shortage

  • Commodity-reliant markets of Muscat, Santiago and Singapore are expected to cool in 2017

  • The top five most expensive places to build are New York City, San Francisco, Zurich, Hong Kong and London.

Economic outlook

New South Wales and Victoria continue to power ahead with solid economic growth and high levels of public sector infrastructure investment in roads and rail. The resources states of Northern Territory, Queensland South Australia and West Australia are slowly emerging from the hangover of the commodities market.

Construction market and trends

Residential apartment building programmes in Brisbane, Melbourne and Sydney have been surging, fuelled by low interest rates and strong demand from Chinese investors in the capital cities.

There are fears that Brisbane and Melbourne are reaching the end of the apartment cycle. Commercial construction remains less buoyant, but growth in the financial and tourism sectors are driving large tourism projects, including Jewel on the Gold Coast, Queens Wharf in Brisbane and Barangaroo in Sydney.

The Perth market remains a little flat with resources activity in a slump, but state investment in infrastructure and the airport expansion will keep the sector afloat.

Future outlook

The outlook for Australia is positive, notwithstanding the risk of higher borrowing costs and the high level of private household debt tied up in real estate. Investment in residential construction is entering a cyclical slowdown, but retail, hotels and infrastructure will go some way to closing this gap.

Main image copyright: dedivan1923 / 123RF Stock Photo

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