Both Sydney and Melbourne now have the dubious honour as two of the top 10 most expensive cities in which to live but interestingly building costs are much higher in other parts of the world.
Switzerland remains the most expensive place in the world to build new properties, according to the latest annual International Construction Cost Comparison Report released by built asset consultancy EC Harris.
In fact construction costs in Switzerland are more than 25% higher than anywhere else in the world.
The annual report, which benchmarks the construction costs in 55 countries across the globe using UK prices as a baseline, found that Europe continues to be the most expensive continent in which to build, providing eight of the top ten entrants in the final league table.
According to the report, the price of construction in Switzerland is 71% higher than in the UK where costs are now more than 20% below their peak price in mid-2008.
Ten most expensive countries in the world to build:
1 – Switzerland
2 – Denmark
3 – Sweden
4 – Ireland
5 – France
6 – Australia
7 – Germany
8 – Austria
9 – Belgium
10 – Canada
Denmark retained its position as the second most expensive place to build, closely followed by its Scandinavian neighbour Sweden. Australia and Canada were the only non-European markets to make it into the top ten although Bahrain just missed out, finishing in twelfth place overall alongside the UK. India and Sri Lanka were tied as the cheapest countries in which to build with construction costs estimated to be 72% cheaper than the UK baseline.
Mathew Riley, head of cost and commercial at EC Harris, said: “It’s no surprise to see that Switzerland and the Scandinavian countries are the most expensive places to build as high labour costs and the need to import materials are all combining to drive prices up. The interesting element is that we’re now starting to see signs that developing nations are closing this gap as they continue to invest in significant new-build programmes to fuel further GDP growth.”
The report also underlines the need for Western economies to start planning ahead now to guarantee access to the raw materials needed for future construction projects. During the economic downturn global supply chains have shifted their focus to meeting the demands of economies like China and India and are likely to continue to prioritise them over the coming years as they offer the greatest revenue growth opportunities.
Fortunately because of Australia’s abundance of raw materials, we’re not likely to have the supply shortages other countries may have in the future. However our labour costs are more than many other countries and when you add in the planning and infrastructure costs, new construction in Australia will remain expensive.
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