Hong Kong And Macau Are Asia%E2%80%99S Most Expensive Construction Markets Turner Townsend
According to a recent survey conducted by Turner & Townsend, Hong Kong and Macau are the most expensive construction markets in Asia this year. Globally, Hong Kong ranks as the ninth most expensive market, with an average cost of US$4,500 ($6,083) per square metre (psm). Meanwhile, Macau takes the 12th spot with an average construction cost of US$4,269 psm. Singapore, on the other hand, falls in the middle of the pack, ranking 35th globally with an average cost of US$3,129 psm.
Turner & Townsend’s survey also revealed that while the global construction industry continues to face challenges, overall inflationary pressure has started to ease. This has resulted in a more stable cost environment, making it easier for investments to flow towards key growth sectors such as data centres, healthcare, and manufacturing.
Japan, on the other hand, saw a decline in average construction prices this year due to a weaker Japanese Yen. As a result, no Japanese cities were included in the top ten list of most expensive Asian construction markets. Tokyo and Osaka, previously known for their high construction costs, now rank 13th and 17th, respectively, with average costs of US$4,127 psm and US$3,985 psm. The report cites a combination of strong global inflation, moderate economic growth post-pandemic, and a significant devaluation of the yen as the key factors behind Japan’s lower construction costs this year.
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In most global markets tracked by Turner & Townsend, the scarcity of skilled labor remains a major factor driving up construction costs. Sumit Mukherjee, head of real estate, Asia, at Turner & Townsend, emphasizes the need for companies to keep an eye on labor. While Asian labor markets are typically known for their high availability and low wages, the demand for specialized construction in sectors such as advanced manufacturing and data centers may lead to a shortage of high-skilled workers.