Sydney construction Barangaroo
Image: Sander Dalhuisen

Sydney is Australia’s most expensive city for construction according to a recent report by Arcadis. 

It places 34th on the list of the world’s 100 leading cities, with Brisbane coming in at 56, Melbourne at 61 and Perth at 62.

The report credited the high price of construction to the state of Australia’s economy which it described as continuing to “lose momentum” and a steep decline in activity within the residential sector.

“Cost pressures remain high on an industry-wide basis, across the whole of Australia,” the report stated. 

“This is due to several factors including a robust demand for construction materials, a lack of market competition, skills shortages, increasing energy and labor costs and elevated supplier prices, due to strengthening commodity prices.”

‘‘In November 2018 construction activity levels fell at their fastest rate in nearly four years,” Arcadis Australia Pacific national director, cost and commercial management Matthew Mackey said

Despite this, the total value of “non-residential construction is expected to increase in 2019,” said Mr Mackey.

“The cycle of infrastructure construction is continuing to fuel price increases while also creating a significant demand for tradesmen to meet the current and upcoming workload. This demand will continue to put further pressure on both trade pricing and margins.”

Elsewhere in the world, the top three most expensive cities remained New York City, San Francisco and Hong Kong, as with Arcadis’ last report. The difference was New York City rose to overtake San Francisco, landing the spot for the world’s number one most expensive city for construction.

Top 10 most expensive cities for construction:

1. New York City

2. San Francisco

3. Hong Kong

4. Copenhagen

5. Geneva

6. London

7. Macau

8. Zurich

9. Tokyo

10. Boston

Arcadis’ report is based on “a survey of construction costs, review of market conditions and professional judgement from its experts globally”. 

Read the full report here.

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