Asia’s megacities remain some of the world’s cheapest places for new construction, according to the International Construction Costs 2019 report published by Arcadis, a global design and consultancy for natural and built assets. Only four cities in Asia rank inside the global top 50 for the cost of construction while nearly all cities in China, India and Southeast Asia are ranked among the cheapest.
Hong Kong ranks 1st in Asia for construction costs, followed by Macau and Tokyo, and ranks 3rd in the world. Singapore ranks 4th in Asia but only 48th in the world, due to a slowdown in public sector construction, nervous financial markets, and also an increased number of cities in the rankings.
The annual report, Arcadis’ International Construction Cost 2019, details and ranks the relative cost of construction in the world’s major cities, helping guide companies towards a higher long-term return on investment for construction projects. Arcadis has also expanded the report for 2019, summarizing the costs in 100 cities, including 18 in Asia, up from the 50 covered in 2018.
The report found that the majority of Asian cities are significantly cheaper with relative construction costs affected by currency fluctuations, commodity prices and increasing demand for development in some growing economies. These changes have seen the relative cost of building in Asia markets decrease significantly compared to other regions. Significant factors for the reduced costs include lower wages, more accessible construction materials, and more land available at lower costs.
In China, however, despite being a relatively cheaper market for new construction, Arcadis expects that higher interest rates and increases in material and labour costs will likely lead to a rise in construction costs over 2019.
According to the report, this year’s cooling off across the global economy will also have an impact on construction markets. These include a tightening of financial conditions, a volatile supply of materials and costs, and downside risks on construction demand. Construction companies and their clients will need to make smart decisions focusing on innovation, benefits to citizens and sustainability in order to consolidate long-term success.
Download the full report here for the complete rankings and other findings.