A report by architecture consultancy Arcadis has shown It is more costly to build in Hong Kong than anywhere else in Asia, while globally Hong Kong is second only to New York in construction costs.
Construction cost in Macau is the second most expensive in Asia, followed by Singapore.
A shortage of construction operatives and an aging workforce are among the challenges facing the Hong Kong construction industry.
“Hong Kong markets are stabilizing at peak levels of activity, which have seen projects affected by significant resourcing challenges,” said the 2017 construction cost report. “Operating at peak levels spells a problem for Hong Kong’s authorities because of the shortage of construction operatives available.”
It estimated there is a shortage of more than 10,000 workers, and this has been driving up prices and delaying projects.
“The rising labor cost is mainly due to an aging workforce and a shortage of labor force,” said Francis Au Kai- ming, Arcadis Hong Kong and Macau managing director.
“The problem is complicated as solutions based on migrant labor are not acceptable to the local population. As a result, initiatives to increase industry productivity are gaining a higher profile in Hong Kong.”
The recent building cost for local private homes is said to be about HK$4,000 to HK$5,000 per square feet. It may go higher if there are technical difficulties, such as building on a sloping site.
The report said the workload is expected to be sustained at current levels, with big projects such as the Hong Kong-Zhuhai-Macau Bridge and the Guangzhou-Shenzhen high-speed rail link well in their advanced stages and new ones – including the third airport runway and the expansion of East Kowloon central business districts – lined up for the next 10 years.
Financial Secretary Paul Chan Mo- po has said spending on infrastructure is expected to remain at a high level in the next few years.
The report also ranked the mainland’s “One Belt, One Road” initiative, valued at US$150 billion (HK$1.17 trillion), as the costliest construction project in 2017.
India’s Delhi Mumbai industrial corridor, valued at US$90 billion, is second.