The latest International Construction Costs report by Arcadis shows New York City continues to be the most expensive place in the world for construction.
The international design and construction firm says that New York is 50 per cent more expensive to build than the average US metro area, and is 20 per cent more expensive than other costly cities including Chicago, Boston and Los Angeles.
The high costs are explained by the shortage of available real estate, which impacts the optimal storage and staging of materials.
Acardis says it expects New York City to remain the most expensive city for construction through 2017
“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,” says Acadis program management head Edel Christie. “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.”
Internationally, the top 10 cities are:
- New York (no change on 2016)
- Hong Kong (up 1 place)
- Geneva (up 1 place)
- London (down 2 places)
- Macau (no change)
- Copenhagen (no change)
- Stockholm (no change)
- Frankfurt (no change)
- Paris (no change)
- Vienna (up one place)
London has fallen two places, with the drop largely due to the devaluation of the pound following the UK’s Brexit vote, making it less expensive compared to other cities. In London, Arcadis found that development activity in infrastructure is strong, but key commercial sectors including offices and prime residential have seen a slowdown due to Brexit-related uncertainty impacting some developers’ investment decisions.
You can download and read the complete report here.
Earlier, the New York Building Congress (NYBC) reported that the value of construction starts in New York City had dropped 22 percent from $41.1 billion in 2015 to $32.2 billion in 2016.
The NYBC attributes the decline to an $8 billion year-over-year plunge in residential starts, leaving the commercial segment of nonresidential construction — especially offices — to do the heavy lifting for the NYC market.