Singapore remains the fourth most expensive city in Asia to build in, according to an international Construction Costs 2019 report published by Arcadis.
The report details and ranks the relative cost of construction in 100 of the world’s major cities.
Khoo Sze Boon, Head of Cost Management & Quantity Surveying at Arcadis Singapore, commented: “The International Construction Costs 2019 report provides important insights into construction markets around the world.
“Singapore remains the fourth most expensive city in Asia to build in and it’s clear that many developers are aware of the pressing need to improve productivity. By investing in technology and digitalization, it can help create better quality development, strengthen their competitive advantage and, ultimately, light a path towards long-term value creation.”
Singapore follows Hong Kong, Macau and Tokyo in Asia as the most expensive Asian cities to build in and ranks 48th in the world. Last year, Singapore was 27th but the change in its ranking is mainly because of an increase in the index’s size from 50 cities in 2018 to 100 in 2019.
The reports say Singapore’s construction market is experiencing growing trade conflicts, nervous financial markets and signs of its GDP growth reducing.
The Singapore government has showed the economy could cool even further in 2019, with a forecast of 1.5% to 3.5% GDP growth.
The construction sector shrank by 3.4% for the whole of 2018, primarily because of a slowdown in public sector construction activities. However, it is likely to see an improvement in 2019 as successful en-bloc transactions awarded from 2017 to the first half of 2018 are likely to translate into construction activities in the next few quarters.
Prices for key construction materials remained stable over 2018, with an expected rise in prices in 2019. Labour costs remain relatively high in Singapore.
One factor that will likely have a major influence on the market is the government’s push to transform the construction industry with Integrated Digital Delivery (IDD).
IDD will connect stakeholders in construction projects, mandate the adoption of Building Information Modelling (BIM) and establish the Singapore Virtual Design and Construction Guide. The construction market in Singapore will grow by 5% in 2019, and the tender price index will increase by 1-3%.