Australia has some of the world’s most expensive construction markets, although the tide is starting to turn, an international report has found.
New York is the most expensive place to undertake construction activities, according to an analysis of residential and commercial projects in 35 markets around the world.
The report by multinational professional services company Turner & Townsend also ranked Sydney at 10th, Perth at 16th, Melbourne at 19th and Brisbane at 20th place.
Senior economist Gary Emmett said Australia is becoming a relatively cheaper place to build, due to low interest rates and a falling Australian dollar.
“The 2015 report shows that compared to 2011, it would cost overseas investors paying in US dollars 13 per cent less to construct buildings in Australia, which is a significant reduction,” he said.
Mr Emmett said that with the exception of Sydney’s apartment market, the cost of construction is stable and the outlook moderate for the medium term.
“Overall, it is a great time to build. Construction costs should remain fairly stable although some residential construction trades may become increasingly difficult to source, adding pressure to costs,” he said.
“Foreign investors are expected to seek more opportunities here to capitalise on the favourable conditions to build projects.”
Meanwhile, the Turner & Townsend report found that the cost of building a detached house is $1,600 per square metre in Melbourne, $1,650 in Brisbane and Perth, and $1,750 in Sydney.
Building a prestige detached house costs $2,700 per square metre in Melbourne, $2,850 in Sydney, and $3,000 in Brisbane and Perth.
Townhouses cost $1,700 per square metre in Brisbane, $1,750 in Melbourne, $1,850 in Perth and $1,900 in Sydney.
Construction costs for low-rise apartments are $1,800 per square metre in Brisbane, $1,900 in Perth, $1,960 in Melbourne and $2,100 in Sydney.
High-rise apartments cost $2,500 per square metre in Brisbane, $2,700 in Melbourne and Sydney, and $2,900 in Perth.