A global survey conducted by Turner & Townsend has revealed that Hong Kong and Macau have become the most expensive construction markets in Asia this year. The report highlights that the rising costs in these regions have placed Hong Kong and Macau among the top construction markets worldwide.
Labour Shortages and Specialized Construction Demand
“Companies need to be vigilant about labour availability. Traditionally, Asian labour markets have been known for high accessibility and low wages. However, as demand grows for specialized construction sectors such as advanced manufacturing and data centers, there may be bottlenecks of high-skilled workers in these industries,” says Sumit Mukherjee, Head of Real Estate, Asia, at Turner & Townsend.
Global Rankings and Cost Insights
Hong Kong ranks as the ninth most expensive construction market globally, with an average cost of US$4,500 (approximately S$6,083) per square meter (psm). Macau follows closely in 12th place, with an average construction cost of US$4,269 psm.
The survey indicates that a shortage of skilled labour is a significant factor driving cost inflation across the construction industry worldwide. Despite the global construction industry continuing to face challenges, the report suggests that overall inflationary pressure is softening, stabilizing costs, and redirecting investment flows toward major global growth markets such as data centers, healthcare, and manufacturing.
Japan’s Construction Costs Decrease
Interestingly, the report highlights a sharp decline in construction costs in Japan, driven by a weakening Japanese Yen. As a result, no Japanese cities made it to the top ten list of the most expensive construction markets in Asia. Tokyo and Osaka currently rank 13th and 17th most expensive, with construction costs of US$4,127 psm and US$3,985 psm, respectively.
The report attributes Japan’s lower overall construction costs this year to “strong global inflation, moderate post-pandemic economic growth, and a significant devaluation of the yen to a 34-year low.”
Singapore’s Moderate Construction Costs
Singapore’s construction market remains relatively moderate, ranking 35th on the global list. The average construction cost in Singapore this year stands at approximately US$3,129 psm, reflecting a more stable pricing environment compared to other major Asian markets.
These findings underscore the significant regional disparities in construction costs across Asia, with Hong Kong and Macau leading the way as the most expensive markets, while Japan and Singapore exhibit more moderate cost trends.