Dublin 4th most expensive European city to build – survey

Dublin is the fourth most expensive city in Europe to build, a new survey shows today, while it also makes it into the top 25 most expensive places to build globally.

The International Construction Market Survey 2024 Report, from global professional services company Turner & Townsend, shows that Switzerland remains the most expensive country to build in across Europe with Zurich and Geneva named in the top five most expensive cities worldwide.

Based on a global survey of 91 cities, Zurich is now the most expensive place to build in Europe, with an average cost of $5,035 per metre squared, an increase of 8.2% on last year.

Geneva with an average cost of $5,022 per m2 is ranked second, with Munich third at $3,797 per m2, Dublin fourth at $3,775 per m2 and Vienna fifth at $3,615 per m2.

Turner & Townsend said it was optimistic about the Irish construction market as it begins to recover and move towards green investment opportunities. Despite ongoing geopolitical challenges in Europe, its unique position in the post-Brexit landscape and a cooling inflation rate have created a favourable environment for growth, it added.

It also noted that Dublin continues to see robust investment in both private and public sector housing projects, driven by an acute rental shortage.

Across the 15 European cities surveyed, including Dublin, labour costs average $68.6 per hour – boosted by the highs of Geneva ($125.2) and Zurich ($124.9) who lead the continent.

The company said that a significant factor driving inflation worldwide is a scarcity of skilled labour, with a staggering 79.1% of markets reporting skill shortages.

It said this stands in stark contrast to just 9.9% with a labour surplus. The remaining 11% indicated a balanced labour market.

The data in today’s report points to lowering construction price inflationary pressure overall. Turner & Townsend has modestly reduced its 2024 construction cost inflation forecasts compared with last year’s predictions.

Construction inflation in most markets is driven by a backlog of projects, which are gradually moving forward as construction costs stabilise, it added.

Philip Matthews, Managing Director of Turner & Townsend in Ireland, said that after several years of economic turbulence and the significant impact of the ongoing conflict in Ukraine, it is encouraging to see emerging opportunities within the European construction sector.

“With a 1.5% GDP growth forecast for 2024, Ireland is positioned as an outlier compared to the Euro area’s sluggish 0.8% growth. This resilience is due, in part, to Ireland’s active, post-Brexit market, which has been less impacted by the Ukraine conflict than many of its European neighbours,” Mr Matthews said.

He said that Turner and Townsend are observing heightened activity across various industries, with Dublin in particular buoyed by investment into both private and public sector housing developments on the back of the ongoing rental crisis.

“The increasing emphasis on sustainability requirements for real estate portfolios is likely to alter investment patterns and asset values. Going forward, it will be essential to carefully evaluate contract models and carbon costs to effectively mitigate risks,” he added.

Today’s survey of 91 global cities shows the US continuing to dominate the rankings of the most expensive places to build, with six US cities in the top ten.

New York has retained its position as the most expensive market to build in for the second year running at an average cost of US$5,723 per m2.