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London retakes crown as most expensive city for construction

April 18, 2024
in Business
London retakes crown as most expensive city for construction
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Photo of London from Arcadis' International Construction Costs 2024

Photo of London from Arcadis’ International Construction Costs 2024

Quantity surveyors and construction economists from consultancy firm Arcadis have compared construction costs in 100 cities around the world, as they do each year.

London is usually near the top of the list and this year comes out as number one – the most expensive city in the world for construction – thanks largely to an increased burden of red tape and regulation imposed by government over the past few years.

All seven British cities in the International Construction Costs 2024 report from Arcadis are listed among the top 20 most expensive for construction.

The Swiss cities of Geneva and Zurich come second and third with and Munich (Germany) in fourth. Rising costs and double-digit price growth in Germany have propelled the Bavarian capital significantly up the rankings, this year surpassing New York (5th) and San Francisco (6th) in terms of relative cost to build.

Bristol entered the top 10 for the first time, behind Copenhagen and Hong Kong.

The cost comparison was developed covering 20 different building types, including residential, commercial, and public sector developments, and is based on a survey of construction costs, a review of market conditions and the professional judgement of Arcadis’ global team of experts. The calculations are based in US dollars and indexed against the price range for each building type relative to Amsterdam as a benchmark.

Related Information

Although levels of inflation were moderate in the UK, specification enhancements related to building safety, sustainability and client expectation pushed prices up further than most other locations. Viability challenges have continued to affect projects, even as inflation has fallen. New regulations focused on low carbon emissions and improved building safety also created uncertainty and added to project costs, the study found. Uncertainty could continue in 2024, given local, mayoral and national elections are due in the coming months, Arcadis says.  

Arcadis UK cities director Peter Hogg said: “London finds itself back in the number one spot in the ICC 100 index for 2024, reflecting the capital’s resilience in the face of challenging conditions. Despite a 10% year-on-year decline in construction output and a significant 20% drop in housing, the commercial sub-sector experienced a notable 24% rise, largely attributed to retrofit activity. However, the capital has faced declining orders for new work since 2022, exacerbated by high interest rates impacting scheme viability and regulatory changes causing design and planning delays and cost escalations.”

The world’s 10 most expensive cities for construction*

London
Geneva
Zurich
Munich
New York City
San Francisco
Philadelphia
Copenhagen
Hong Kong
Bristol

* According to Arcadis’ International Construction Costs 2024

Where do UK and Ireland cities rank for cost out of the 100 studied?

1. London
10. Bristol
12. Manchester
14. Birmingham
15. Edinburgh
16. Cardiff
18. Glasgow
19. Dublin
28.  Belfast

Got a story? Email [email protected]

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Copyright for syndicated content belongs to the linked Source : TheConstructionIndex – https://www.theconstructionindex.co.uk/news/view/london-retakes-crown-as-most-expensive-city-for-construction

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