Seattle is one of the 10 most expensive places in the world to construct buildings — one of just two markets deemed to be overheating.
That’s according to Turner & Townsend, a British professional services firm that specializes in program, project and cost management, which issued a new report this week that, among other things, looks at the per-square-meter cost of building.
A construction worker guided rebar in 2014 as it was craned off a truck into the… more
MARCUS R. DONNER | PSBJ FILE PHOTO
Seattle’s cost of $3,014 is the third highest in the United States and the sixth highest in the world. New York and San Francisco are the first and second most expensive, respectively.
Seattle construction costs increased 5 percent last year, and the report forecasts they’ll rise the same amount this year both here and in San Francisco. That is the highest rate forecast for the United States. Global construction costs are expected to increase by 3.5 percent in 2017 after growing by 3.7 percent in 2016.
Economists analyzed data from 43 markets around the world. They examined six project types: apartment high-rises, office buildings, large warehouse distribution centers, hospitals, primary and secondary schools, and shopping centers.
Seven markets are identified as hot and two, Seattle and Bogota, Colombia, as overheating. Hot and overheating markets have a higher number of projects and a constrained supply of labor.
The seven hot markets are Dublin, London, San Francisco, Amsterdam, Dar es Salaam in Tanzania, Tokyo and New York.
The report touches on two issues affecting Seattle — apartment development and infrastructure spending.
“Enduring low interest rates across many economies is fueling the construction of apartment projects but there are fears that the market is overheating,” states the report, which notes that some in the apartment construction industry are wary the sector is peaking.
In Seattle, this is beginning to become a familiar refrain. Fears of an apartment bubble in downtown Seattle, where thousands of units have been built or are under construction, have cropped up recently among economists and other industry experts.
The Puget Sound region is one market where infrastructure investment is increasing, further driving up construction costs. Sound Transit’s voter-approved $54 billion ST3 expansion plan will be built over 25 years, and by the end of this year the agency will be planning, designing or building 24 train and bus projects in the tri-county area.
Here are the world’s 10 most expensive construction markets and the price per square meter of building things there:
New York: $3,807
San Francisco: $3,549
Hong Kong: $3,488
UK South: $2,617
Marc Stiles covers real estate for the Puget Sound Business Journal.