Victoria, Australia - Melbourne is the 14th most expensive city in the world to build in and New York is the world’s most expensive city, according to our 2017 International Construction Cost Survey.
The high density Asian cities of Hong Kong (second) and Macau (fifth) feature in the top five, along with Geneva (third) and London (fourth). The report focused on Melbourne to represent Australian cities, which came 14th in the rankings.
Melbourne increased its position from 15th last year largely due to the prolonged impact of the slowdown in commodity markets and fluctuations in global currencies.
Gareth Robbins, Director Built Asset Consultancy, Arcadis Australia Pacific: “Despite a strong pipeline of infrastructure projects in Victoria and across the country, Melbourne still sits in the top third of the most expensive cities to build in globally.
“Construction costs remain high in part due to Australia's geographic isolation. Compared to Europe and the Americas, there is far less private sector competition to complete construction work and these companies import a large proportion of construction materials, which can fluctuate in price due to the Australian dollar and taxes.
“Despite the cost, Melbourne has a strong plan for construction across rail, road-widening projects and new buildings underway.”
At a global level, London has fallen two places since last year, largely due to the devaluation of the pound following the UK’s Brexit vote making it less expensive compared to other cities. Shanghai, in 35th, and Manilla, 38th, are the biggest fallers overall, both dropping eight places. The highest climbers in the ranking of 44 cities are Auckland, which is up to 13th, Belgrade, to 30th, and Taipei, 40th, all of which rose four places compared to 2016.
“High density cities like New York and Hong Kong are particularly high cost locations to build due to constraints with land availability, accessibility and land values. Despite this they continue to prosper and see significant development activity thanks to their attractiveness as desirable global cities for commerce and people,” continued Robbins.
“The cost of building critical infrastructure and new buildings over the course of a long build phase is notoriously difficult to predict, making the challenge of providing as much cost and commercial certainty as possible a vital one.”
The top ten most expensive cities to build in are outlined below, with changes from 2016 in brackets.
1. New York (-)
2. Hong Kong (+1)
3. Geneva (+1)
4. London (-2)
5. Macau (-)l
6. Copenhagen (-)
7. Stockholm (-)
8. Frankfurt (-)
9. Paris (-)
10. Vienna (+1)
To view the full report, visit the 2017 International Construction Costs Survey.
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