Construction costs in London third highest in the world
Average construction costs in London are the third highest in the world.
It costs £2454 per square metre to complete a construction project in London, according to latest annual International Construction Market Survey.
This puts the city behind Zurich – where construction costs have been calculated to be £2558 per sq m ($3700) – and New York, where building work costs 2523 per sq m ($3,650).
The research analyses input costs, such as labour and materials, and calculates the average construction cost for both commercial and residential projects in the 38 markets.
The most expensive cities are being rapidly caught up by American tech hubs of San Francisco, where construction costs have risen 5% over the past year to hit £2353 per sq m ($3400), and Seattle – where it is forecast the construction costs will rise by a further 8% past the current £2006 per sq m ($2800).
At the other end of the inflationary scale, Beijing’s construction costs fell 10% in the year to April – an acceleration of a downward trend that saw costs fall by 5% in the year before. The report predicts that prices will remain stagnant in the Chinese capital over the next year.
In a reflection of the weakness of demand in oil-reliant economies, the research also predicts zero cost inflation over the next 12 months for the United Arab Emirates and Muscat in Oman.
On the other hand, the markets in Seattle and New York are regarded as overheating, while Dublin, London, San Francisco and Kuala Lumpur are hot.
At the start of the year, the International Construction Costs Index names London as the second most expensive city to build in, behind New York but ahead of Hong Kong, Geneva and the Chinese city of Macau.
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