The annual Construction Costs Comparison Report by EC Harris Research has found that countries in the Asia Pacific region have far lower building costs than comparable Western countries, even though countries in Asia have experienced significant economic growth.
This report is now into its seventh year, and compares building costs per square meter in 56 different countries around the world against building costs in the South of England. This year it found building costs in India and Sri Lanka were the lowest in the Asia Pacific region, at 70% less of those in the UK. China was the second cheapest region, with building costs some 55% lower than in England. Property prices in Hong Kong and Singapore have increased dramatically over the last couple of years, but building still costs 10% less than in Britain.
Japan was the most expensive region, and building costs here were 24% higher than in Britain, but the report was compiled before the March earthquake and tsunami. The Philippines, Vietnam and Malaysia were amongst the cheapest regions in which to build, with costs averaging 54% less than in the UK, while construction costs in Thailand were 35% lower.
Simon Rawlinson, Head of Strategic Research and Insight at EC Harris in London said “Growth in Asia will be broadly based; markets in Europe and the USA will under perform in comparison.”
During the last year and a half, the costs of construction materials such as steel, oil and copper have increased substantially, and this has affected building prices globally. However there are signs that prices have now stabilized, as oil has already fallen 10% from its peak price. Experts think the costs of construction materials could fall during next year and 2013.
Adam Smith, Market Analyst for Ocean Villas Group in Singapore says “Whilst prime locations such as London and New York remain in high demand, we have already seen a significant number of mid-level investors moving their money out of Europe and the USA into emerging Southeast Asian economies.”