Breaking is not building. Especially when it comes to real estate. Here, every brick has its cost, and their pile turns into a whole bunch of money. How big is this pile? It all depends on the country you choose. Today we decided to share the ranking of the most expensive cities for construction. Honestly, the results even surprised us. Remember, no matter what location you choose, don't forget that the process of building a house consists not only of site selection, design project development, and direct construction, but also from legalization of unauthorized construction without the necessary documentation and permits, even Buckingham Palace would have remained simply an illegally erected shack.
Rating of the most expensive cities for construction
Analysts analyzed more than 100 cities worldwide. They looked at construction sites of residential and commercial properties, as well as state and private enterprises. In total, experts examined the construction process of 20 types of buildings to provide the most complete picture. For greater convenience, the unit of measurement for construction cost was chosen as the US dollar with indexing relative to Amsterdam. The list of finalists looks as follows:
🥇 London, United Kingdom 🇬🇧;
🥈 Geneva, Switzerland 🇨🇭;
🥉 Zurich, Switzerland 🇨🇭;
4️⃣ Munich, Germany 🇩🇪;
5️⃣ New York, USA 🇺🇸;
6️⃣ San Francisco, USA 🇺🇸;
7️⃣ Philadelphia, USA 🇺🇸;
8️⃣ Copenhagen, Denmark 🇩🇰;
9️⃣ Hong Kong, China 🇨🇳;
🔟 Bristol, United Kingdom 🇬🇧.
Unexpectedly for everyone, London took first place. It surpassed many world capitals that hold leading positions in the rating of the most expensive real estate
Why is building in London the most expensive?
London has just entered the top ten most expensive cities in the world, but when it comes to construction costs, it has no equal. Why does the start of construction work in the capital of the United Kingdom require a whole fortune? There are several reasons for this:
- Inflation and interest rates. Even minor inflation in combination with high interest rates becomes an additional problem and increases the costliness of projects.
- Raising standards. Modern residential complexes and commercial facilities are held to higher standards. In particular, there are strict requirements for the durability of buildings, safety, energy efficiency, and longevity of materials. Investor expectations are also increasing, which inevitably affects construction costs.
- State regulation and bureaucracy. Over the past few years, the number of regulatory and administrative requirements that make the construction process difficult has significantly increased.
- Decrease in construction volumes. This year, the overall volume of construction has decreased by 10%, and in the context of residential real estate by as much as 20%. This trend affects not only demand, but also the number of new projects. As a result, there are significantly fewer orders for new work coming in.
Construction in London is overshadowed by unnecessary paperwork. However, at the same time, it demonstrates its reliability. All these slightly inflated requirements for projects are intended to make them truly high quality.