Melbourne made the list of top 20 most expensive cities to build in, according to the latest International Construction Cost report published by Arcadis.
Coming in at 14th, Melbourne’s ranking increased since 2016 largely due to the prolonged impact of the slowdown in commodity markets and fluctuations in global currencies.
Arcadis Director Built Asset Consultancy Gareth Robbins said despite a strong pipeline of infrastructure projects in Victoria and across the country, Melbourne still sits in the top third of the most expensive cities to build in globally.
“Construction costs remain high in part due to Australia’s geographic isolation. Compared to Europe and the Americas, there is far less private sector competition to complete construction work and these companies import a large proportion of construction materials, which can fluctuate in price due to the Australian dollar and taxes.
“Despite the cost, Melbourne has a strong plan for construction across rail, road-widening projects and new buildings underway.”
Taking the top spot in the construction report was New York followed by the high density Asian cities of Hong Kong (second), Geneva (third) and London (fourth).
At a global level, London fell two places since 2016, largely due to the devaluation of the pound following the UK’s Brexit vote making it less expensive compared to other cities.
Shanghai, in 35th, and Manilla, 38th, were the biggest fallers overall, both dropping eight places.
The highest climbers in the ranking of 44 cities were Auckland (13th), Belgrade (30th) and Taipei (40th) which all rose four places compared to 2016.
“High density cities like New York and Hong Kong are particularly high cost locations to build due to constraints with land availability, accessibility and land values,” Mr Robbins said.
“Despite this they continue to prosper and see significant development activity thanks to their attractiveness as desirable global cities for commerce and people.
“The cost of building critical infrastructure and new buildings over the course of a long build phase is notoriously difficult to predict, making the challenge of providing as much cost and commercial certainty as possible a vital one.”
The top ten most expensive cities to build in are:
- New York
- Hong Kong