Singapore ranked as Asia’s third most expensive city for construction

Hong Kong and Macau top the list.

Singapore is Asia’s third most expensive city to build in, according to the International Construction Costs Index published by design and consultancy firm Arcadis. The list is topped by Hong Kong, followed by Macau.

Globally, Singapore is the tenth most expensive city for construction. 

The index analyzed the relative cost of construction across 44 major cities and found that robust currency performance alongside significant resource curbs allow for the cities to command premiums of up to 60% compared to several European locations.

“Singapore’s construction market has enjoyed a strong recovery since 2010. It is for this reason that the recent slowdown in residential and commercial markets represents something of a correction. In the private sector, both the residential and industrial sectors were relatively weak in 2015 and the office market also suffered due to oversupply,” said Alan Hearn, Arcadis’ Head of Buildings Solutions for Asia, in a media release.

He further stated that continued investment in Singapore road and rail network can be expected since the two received relatively low investment in recent years.

Hearn also noted that China’s economic slowdown and flagging demand in many cities, such as Singapore and Jakarta, imply that growth in the region is anticipated to diminish as 2016 approaches.

Further, the viability of important commercial and public sector schemes are threatened as prices continue to soar. The growing costs coupled with the weakening value of currencies could limit demand from emerging market investors in these areas, which could potentially instigate a shift in interest to lower-cost cities.

The index also noted that all construction markets worldwide witnessed overall cost inflation restricted on back of the decline in commodity prices throughout 2015. Growing uncertainty over prices, particularly with oil, will have a long-term impact on the global construction industry.