That’ll Cost How Much?! 2017’s Most Expensive Construction Markets
Every year, the Turner & Townsend International Construction Markets Survey is completed to convey what cities have the priciest construction markets, as well as the cities with the most cost-effective construction industries. As a result, the global survey is also utilized to assess different trends that are occurring across these markets. This year, 43 high-production construction markets were included in the effort.
Most noteworthy, New York City overtook Zurich, Switzerland, as the most expensive of the surveyed construction markets in 2017. Within this article, we’ll provide an in-depth analysis of how the Big Apple was able to obtain this jump. Also, we’ll cover notable aspects of the construction industry in the other top-ranked markets.
The Most Expensive Construction Markets
The top 5 most expensive cities for building in 2017 included two American cities (the two of which snagged the two top slots) and experienced quite a bit of movement within incumbent cities on the list.
- New York City, NY, USA
- San Francisco, CA, USA
- Zurich, Switzerland
- Hong Kong, China
- London, England
Notorious for their high real-estate price tags, New York and San Francisco had expenditure rates of $354 and $330 per foot, respectively. As a result of the American cities’ high rates, Zurich was bumped from #1 in 2016 to #3 in 2017. Another notable move was London to the #5 spot; the capital of the United Kingdom was exceeded by Hong Kong, which grabbed #4.
Why New York Comes Out on Top
“Expensive” tends to be one of the first words that come to mind when discussing New York in a general matter. Therefore, it’s no surprise that this sentiment translates to its construction sector as well. In fact, the average wage of construction workers in the city is $100/hour. Consequently, there seems to be no sign of the growth of its market size slowing, as it has increased by over 3% for two consecutive years.
The Least Expensive Construction Markets
Not all large cities had building costs that broke the bank. In contrast, these metropolises were deemed the five cheapest places to build:
- Bangalore, India
- Beijing, China
- Dar es Salaam, Tanzania
- Warsaw, Poland
- Nairobi, Kenya
One of the most significant trends behind the cheaper costs in these markets was a low average cost of labor.
Factors Driving the Ratings
A notable outcome of the survey is a heavy presence of US cities within the top ten. Seattle and Houston both were included, no doubt due to their thriving business sectors. A driving factor of the costliness of North American cities is that they have the highest labor costs compared to the other cities that partook in the study.
Furthermore, another critical finding of the survey is that all 43 of the participant cities, with the exception of Perth, Australia, saw an increase in construction industry costs, and over half had noted labor shortages.
The Future of the Bottom Line in Construction
While the construction industry continues to grow across the majority of these markets, concerns regarding inflation on a global scale and the effect of low-interest rates have been raised.