Macau is the second most expensive region in Asia for construction, a report by design and architecture consultancy firm, Arcadis, concluded in its annual survey results published this week.
The reason for the high relative costs is a shortage of available land partly due to large casino projects that are currently under construction. However, the ability of Macau to easily import foreign construction workers, unlike in Hong Kong, helps to reduce the impact of labor costs in the construction industry.
Jeff Wong, a national director for capital markets at Jones Lang LaSalle Macau, said yesterday that construction are costs are only one component of three factors largely deciding residential house prices.
“A developer looks at three things when setting the residential price,” he told the Times, “the cost of the land, the cost of development [construction] and the profit they expect to make.”
The Arcadis report compares the relative construction costs in 44 of the world’s major cities, with the theme of “Cost Certainty in an Uncertain World.” The assessment takes into account developments such as product quality, supply chain and cost differential factors specific to each city, according to a summary posted by the firm.
Hong Kong is the most expensive city in Asia and the second most expensive internationally to build in due to the shortage of labor in the construction industry.
“Hong Kong markets are stabilizing at peak levels of activity, which have seen projects affected by significant resourcing challenges,” noted the report. “While big projects such as the Zhuhai- Macau bridge link and the Guangzhou-Shenzhen High Speed Rail link are well advances, new programs […] are expected to sustain workload at current levels.”
“Hong Kong’s residential, hospitality and commerce markets depend on mainland demand, which so far has been sustained,” it continued, much the same as in Macau.
Macau ranks as the second most expensive in the Asia region and the fifth in the world, according to the Arcadis report, with its position unchanged from last year’s ranking.
For the 44 cities compared, New York topped the list, followed by Hong Kong (2), Geneva (3), Central London (4) and Macau (5).
Other Asian cities also scored high on the international ranking, including Doha (11), Singapore (15) and Tokyo (17). Further down the list was Shanghai (35) and Taipei (40), the only other Chinese cities to be covered in the assessment.
Separately, the report ranked 10 of the highest value construction projects in 2017, with China’s “One Belt, One Road” initiative taking the top spot at approximately USD150 billion.
The developments of both Beijing Daxing International Airport and Chengdu Tianfu International Airport also made the list in positions 9 and 10 respectively. DB
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