Hong Kong has overtaken Switzerland as most expensive construction market, while construction costs in Thailand are ranked 39th of 47 countries surveyed in new research.
According to the 2013 International Construction Costs Report from global built asset consultancy EC Harris, construction costs in Thailand are among the cheapest in the world although ahead of regional counterparts Malaysia and Vietnam.
The annual study, which benchmarks building costs in 47 countries across the globe, found that relative construction costs have been affected by substantial fluctuations in currency throughout the year.
Despite a stagnant economy, Europe has six of the top ten most expensive markets in this year’s report, reflecting the competitive challenge faced by the Eurozone.
While their position in the top ten has been retained during in 2013, countries such as Australia and Japan have become more competitive as a result of currency devaluations, with construction costs having fallen in these markets by 8 percent on the previous twelve months.
Simon Rawlinson, Head of Strategic Research and Insight at EC Harris, said: “Currency fluctuations have had a substantial effect on the relative cost of construction in different markets over the past year, particularly the fall of the Yen and the appreciation of the Chinese Yuan.
“This not only makes Chinese imported materials to other countries more expensive, but has also contributed to China moving nearly half way up the global rankings.”
China is by far the world’s largest construction market and as a result any slowdown in the rate of investment will be felt widely.
Hong Kong and Singapore, the region’s major international hubs have relatively mature construction markets that in the medium term are expected to grow at a slower rate than the rest of the region.
In contrast, members of the “next 11” including Malaysia, Indonesia and the Philippines have very ambitious investment for economic diversification and social infrastructure programmes and are likely to see significant growth in construction over the next few years.
Top ten most expensive countries to build.
1. Hong Kong
2. Switzerland
3. Denmark
4. Sweden
5. Macau
6. Australia
7. Japan
8. France
9. Singapore
10. Belgium
The full report can be downloaded HERE.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@allproperty.com.sg
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