Construction costs have been on the rise globally, with inflation being one of the primary factors contributing to the trend. The Arcadis 2023 International Construction Costs (ICC) study compared construction prices in 100 different cities worldwide and analyzed market conditions to rank the most expensive cities to build in.
Top 10 Most Expensive Cities to Build in According to the Arcadis 2023 International Construction Costs Study
The study found that Geneva, Switzerland, is actually the most expensive city to build in, followed by London in second place, New York in third, and San Francisco in fourth place. Munich, Zurich, and Copenhagen maintained their positions from the previous year, ranking fifth, sixth, and seventh, respectively. Hong Kong, with its dollar-denominated or dollar-pegged currency, came in eighth. Boston and Philadelphia made it to the top 10, with a combination of dollar appreciation and local inflation.
Factors Contributing to Rising Costs
Inflation was a significant factor in driving up construction costs in many of the cities included in the survey. Additionally, high energy prices and the invasion of Ukraine had a significant impact on market prices across Europe, adding 5-6% to the region’s price hikes. The resulting disruption of local manufacturing supply chains and energy markets further compounded the rise in these costs.
Building Types Analyzed
The study also analyzed the construction costs for 20 different building types, including residential, commercial, and public sector buildings. The 100 largest cities in the world, spanning six continents, were included in the index.
The Rise of Sustainable Buildings
The study also highlighted the growing demand nowadays for sustainable buildings in desirable locations as the need to combat climate change and meet carbon reduction objectives becomes more pressing. Consequently, a “green premium” is being applied when valuing the most environmentally friendly assets.
The Arcadis 2023 International Construction Costs study provides insights into the most expensive cities to build in worldwide. It highlights the impact of inflation, energy prices, and geopolitical events on construction costs, as well as the growing importance of sustainable buildings. Understanding these factors can help stakeholders make informed decisions about construction projects in these expensive cities.