California Construction News staff writer
San Francisco has become the most expensive city in the world in which to build, with an average cost of $4,729 per sq m, according to a report by Turner & Townsend.
The International Construction Market Survey shows 31% of city markets reporting construction inflation for 2022 of at least 10%, with no correction or fall in costs expected soon. Four of the top ten most expensive markets are American, with Los Angeles is ninth on the list, followed by Boston at number eight and New York at number four.
The survey concludes that high US costs reflect the impact of significant ongoing supply chain disruption and labour shortages meeting a surge in demand, especially for residential construction.
Also, a global rebound in tendering conditions sees 38.6% of world’s construction markets classified as “hot” or “overheating”, up from 10% in 2021, the report concludes and 79.6% of markets are struggling to deliver labour to meet demand for real estate development.
Turner & Townsend said the findings from its study of construction costs in 88 global markets shows the need for an “international outlook” to tackle common inflationary trends.
The top 10 most expensive markets are:
- San Francisco
- New York
- Hong Kong
- Los Angeles
For 2022, Townsend classified seven North American markets as hot or overheating – Austin, Houston, Phoenix, San Francisco, Montreal, Ottawa and Toronto.
The top performing sector for 2022 is industrial, manufacturing and distribution, led by the vast growth in e-commerce as well as pharmaceuticals manufacturing.
In second and third places are residential/social housing and transport (road, rail and ports), which last year were placed fourth and second respectively.