Macau ranked fifth in top ten list
Hong Kong is the most expensive place in the world for construction work, providing further confirmation for what many people, especially developers, have been suspecting and experiencing for some time, according to a survey.
In its International Construction Cost Report released last month, industry consultant EC Harris surveyed 47 countries and found that Hong Kong topped the list as the most expensive construction location in 2013 based on a comparison of average cost of 21 building types relative to the United Kingdom.
Second place was Switzerland while Denmark was third place.
Macau, currently experiencing an infrastructure and casino investment boom, was ranked fifth place in the survey.
The currency used to make the comparison was the Euro.
With the UK as the baseline with an index of 100 as of July 2013, the index range for Hong Kong’s construction cost was 142 to 168.
By way of comparison, the index range for China’s construction cost was 50 to 70 while for Macau, the index range was 112 to 145.
The cheapest place to build in the survey was India with an index range of 29 to 34.
The report said Hong Kong recovered quickly from the 2008 financial crisis with the construction market supported by investment in infrastructure and property development.
“The economy continues to be bolstered by high levels of tourism and consumer spend from the Chinese mainland, and has even benefitted from [quantitative easing], which as resulted in lower interest rates, with private house prices doubling since QE programmes started in 2008,” the report said.
According to the most recent Quarterly Construction Cost Review by cost consultant Langdon & Seah, the tender price index for Hong Kong in the first quarter of 2013 was 1,688, compared with 1,239 recorded in the first quarter of 2008, representing an increase of 34.6 percent.
If the index figure of 940 for the first quarter of 2004 is used, the increase in tender prices is an eye-watering 79.6 percent.
According to Langdon & Seah, a luxury high rise apartment would cost about US$3,525 per square metre of construction floor area.
By comparison, building the same thing in Jakarta would only cost US$885 per square metre.
A prestigious high rise office in Hong Kong would cost US$3,360 per square metre while in Jakarta, it would be US$946.
Several listed contractors have noted in their company results this year of increasing construction costs especially at subcontractor level.