In spite of the mixed economic environment however, the outlook for construction in Asia remains strong as per the most recent issue of the International Construction Market Survey. The annual survey of the consultancy company Turner & Townsend charts the average cost per square meter of construction for residential, commercial and industrial projects across more than 89 countries.
In Asia the demand for property is high in traditional real estate market such as Singapore, Hong Kong, Japan as well South Korea faces skills shortages as well as rising labor costs that result in higher cost of construction.
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Tokyo as well as Osaka are among Asia’s top cities for construction. Tokyo costing $4,677 ($6,167) per square meter and Osaka at US$4,497 for a square meters. Worldwide, Tokyo ranks fifth, and Osaka is ranked sixth in terms of the construction costs.
The construction cost average per square meter in Hong Kong clocked in at $4,292, putting the city in 11th place in the top ten markets worldwide. In Singapore, the construction cost averages $3,307 per square meter and ranks as fourth Asia and 31st in the world.
Turner & Townsend highlights that Singapore was the country with the highest percentage of escalating construction costs in the last 12 months, which was 12%. As the market continues confront challenges with capacity for skills as well as high material and labour costs, the company expects construction costs to 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 developments, as well as an emerging 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 experience an increase in their construction industries due to the lifting of restrictions on Covid-19.
The report also states 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 the growing growth of data centers manufacturing, life sciences and manufacturing.
“Asia’s vast and diverse market economies position it in a position to lead development and attract investments, especially in industries, science and technology transport, healthcare, transport, and real estate development,” claims Cheryl Lum, director and director of data and research for Turner & Townsend Asia.