In spite of the mixed economic environment however, the outlook for construction in Asia remains positive as per the most recent issue of the International Construction Market Survey. The annual survey conducted by the consultancy company Turner & Townsend charts the average construction costs per sq m for residential, commercial and industrial construction projects in more than 89 markets around the world.
In Asia the demand for property is high in well-established real estate areas such as Singapore, Hong Kong, Japan along with South Korea faces skills shortages as well as rising labor costs which can lead to higher cost of construction.
Tokyo Osaka and Osaka are among Asia’s top cities for construction. Tokyo with a price of USD$4,567 ($6,167) per square meter and Osaka at $4,497 per square millimeter. In the world, Tokyo ranks fifth, and Osaka is ranked sixth in terms of the construction costs.
The cost of construction per square meter for Hong Kong clocked in at $4,292, which puts the city in 11th place in the top ten markets worldwide. In Singapore, the construction cost is US$3,307 for each square meter and ranks 4th in Asia and 31st in the world.
Turner & Townsend highlights that Singapore had the highest rate of cost escalation in construction this year, at 12%. As the market continues confront challenges with capacity for skills as well as high material and labour costs, the company is anticipating that construction costs will be high for the foreseeable future, and with an increase rate of 8% predicted for 2023.
Singapore continues to be supported by a steady stream of construction projects fueled by infrastructure, public housing commercial development, as well as an upcoming biomedical field. Additionally, Japan’s construction industry is supported by a substantial pile of construction-related projects in the build-up towards the World Expo that will be held in Osaka in 2025. Hong Kong and Mainland China will likely to see an increase in their construction industries due to the lifting of Covid-19 restrictions.
The report also points out that the construction industry in emerging markets like India, Indonesia, Malaysia, Vietnam and the Philippines is rising due to substantial investment in real estate as well as increasing expansion of data centres as well as life sciences, manufacturing and.
“Asia’s vast and diverse market economies put it in an ideal position to lead growth in construction and attract investors, especially in the fields of industries, science and technology transportation, healthcare, and real estate developments.” claims Cheryl Lum, director and head of research and data for Turner & Townsend Asia.