The Annual Construction Cost Comparison Report by EC Harris Research has revealed that countries throughout the Asia Pacific region have significantly lower building costs than their counterparts in The West, despite experiencing substantial economic growth.
Now in its seventh year, the report compares building costs per square metre in fifty six countries worldwide against construction costs in the South of England.
India and Sri Lanka have the lowest construction costs in the Asia Pacific region; 70% less than in the UK. China comes in next with building costs 55% lower than those in Britain.
And despite property prices booming in Hong Kong and Singapore over the last year, the two islands maintained their costs at 2010 levels; around 10% below those in the UK.
Currently Japan has the highest costs in the Asia Pacific region; 24% higher than in England. However, the report was completed before the March Tsunami which would obviously have had a profound effect on the results as the country rebuilds.
Construction costs for Thailand were low when compared to Hong Kong, Macau and Singapore; ranking 35% lower than the UK.
And the Philippines, Malaysia and Vietnam were amongst the cheapest in the region; averaging 54% below English costs.
Looking forward, Simon Rawlinson, Head of Strategic Research and Insight at EC Harris in London opined: “Growth in Asia will be broadly based; markets in Europe and the USA will underperform in comparison.”
During the last eighteen months, prices for construction materials such as steel, copper and oil have been close to their all-time highs. This has pushed up building costs globally.
However, recent signs indicate that the prices of basic materials have largely stabilised. Oil has already fallen 10% from its peak price and experts believe that this will lead to price drops in many different materials throughout 2012 and 2013.
“It is evident that as the economies in the Asia Pacific region continue to grow and their European peers struggle to recover, the region is becoming more and more attractive to property investors. Lower costs and a propensity for growth equals much higher potential returns than alternatives in Europe and the USA.
“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 South East Asian economies.” commented Adam Smith, Market Analyst for Ocean Villas Group in Singapore.
EC Harris is an international consultancy based in London, UK. Founded in 1911 the company provides services in strategic planning including asset and investment risk management to a wide range of industries such as energy, manufacturing, oil, gas, chemicals, property, public transportation and utilities.
The company has offices in the United Kingdom, China, India, Hong Kong, Macau, Singapore, South Korea, Taiwan, Malaysia, Ireland, France, Germany, Spain, Portugal, Hungary, Ireland, Italy, the Netherlands, Poland, Romania, Russia, Serbia, Slovak Republic, Croatia, Czech Republic, Qatar, Saudi Arabia, UAE, South Africa and Georgia in the USA.