Published By : 09 Dec 2015 | Published By : QYRESEARCH
Hong Kong, China is the most expensive city in Asia for construction, states the International Construction Costs Index published on Wednesday. The findings of the index were published by major global design and consultancy company for built and natural assts Arcadis. Hong Kong follows New York and London, which rank first and second in the list of most expensive cities to build in.
The yearly index by Arcadis evaluates the relative construction costs across 44 leading cities in the world. The index has found that compared to several locations in Europe, significant resource limitations and strong performance of the currency has resulted in these global cities commanding premiums of almost 60 per cent.
This price inflation, however, comes at a cost; as prices continue to spike, the viability of significant public and commercial sector schemes in these cities is put at risk. In addition, the declining value of currencies and soaring costs could limit demand from investors in emerging markets. This, in the long term, could trigger a shift in interest from major cities to lower cost cities.
In the meantime, throughout the current year, every construction market across the globe witnessed an overall cost inflation limited due to the decline in commodity prices. More specifically with oil, rising uncertainties with respect to prices is likely to have a long term effect on the construction industry worldwide.
Head of Building Solutions, Asia, Alan Hearn said that as far as development is concerned, the major financial centers in the world have always commanded a rather considerable premium. However, the massive increase in demand-driven price in cities like London, New York, and Hong Kong has been astounding. In addition to this, the latest shifts in global currency explains why constructing in these cities can cost builders up to 60 per cent more compared to other European cities.