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Dublin is the 19th most expensive global city in which to build – Turner & Townsend
According to the latest ‘International Construction Market Survey’ (ICMS) from Turner & Townsend, Dublin is ranked as the 19th most expensive city in the world to build in and the second most expensive in the EU, after being overtaken by Munich (17th), with an average cost per square metre of €3,409 and €3,482, respectively.
The ICMS states that construction businesses across Europe are reporting reduced activity, as confidence and private investment is hit by steeply rising construction costs, shortages of materials and labour, and difficult financing conditions due to higher interest rates.
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However, Ireland is proving resilient, and construction is set to grow in 2023, partly helped by relatively low labour costs. Construction wages in Dublin average €43.80 per hour, compared to €48.30 per hour in London, €74.80 in Munich, and €110.6 in Geneva.
Inflation across Europe is expected to cool significantly this year, with an average forecast of 6.4% for 2023 over the 16 European regions surveyed – down from 12.7% in 2022. Dublin’s is forecast to be lower than the average at 5%.
The picture across Europe comes in the context of a global construction slowdown, as appetite for real estate investment worldwide is being curbed by a combination of high inflation, labour shortages and rising interest rates that are acting as barriers to project finance.
From a survey of 89 global cities, the US dominates the rankings of the most expensive places to build, with six US cities in the top 10. New York is the most expensive market, with an average build cost of US$5,451 (€5,451) per sq metre.
Philip Matthews, Managing Director Ireland, Turner & Townsend, commented, “The construction industry in Europe and beyond faces headwinds on multiple fronts. Against a backdrop of rising costs of construction, higher interest rates, and market uncertainty, Ireland is proving more resilient than many of its counterparts. But this must not make us complacent. Clients need to keep close to supply chains and work with them to highlight and mitigate any risks as early as possible and ensure delivery pipelines can be met.”
