Hong Kong topples Tokyo as Asia’s costliest city to build, as labour shortage inflates cost

The city’s average building cost this year is projected to rise by 4.8 per cent to US$4,500 per square metre, according to a survey by the UK-based property consultancy Turner & Townsend.

That places Hong Kong in the ninth position out of 91 global cities, behind first-place New York at US$5,723 per sq m and San Francisco in second spot at US$5,489 per sq m, according to the survey.

Hong Kong is not alone with the scarcity of skilled construction workers. A total of 72 markets, or 79.1 per cent of the cities surveyed, reported labour shortage. Macau, less than an hour’s boat ride from Hong Kong, is in 12th place globally as a 3.5-per cent inflation is likely to push the city’s construction cost to US$4.269 per sq m.

“In 2024, we are seeing consistent trends across Asia in response to China’s economic slowdown,” Turner & Townsend’s Asia head of real estate Sumit Mukherjee said, adding that this year’s global construction cost is expected to be inflated by 3 per cent. “The shift to nearshore more manufacturing, to neutralise the impact of China’s slowdown, is creating significant growth and opportunities as other Asian markets invest in sectors like advanced manufacturing.”