Sydney, Melbourne and Brisbane are in the top 25 most expensive cities for construction according to the International Construction Costs 2018 report for Arcadis.
According to Arcadis, demand in Australian cities was driven by buoyant commercial, retail and residential construction, underpinned by billions of dollars in infrastructure investment in rail, road and freight.
Arcadis National Director, Cost and Commercial Management Australia Pacific Matthew Mackey said the cost of construction has always been high in Australia due to its geographic isolation and the associated costs of import taxes, travel and transporting material.
“Another contributing factor in Australia is rising labour costs, which is driven by ongoing skills and labour shortages, which can risk making projects commercially unviable,” Mr Mackey said.
“Despite this, the construction market in Australia is very positive. China remains a huge source of investment and after a three-year decline in activity, the Australian construction market grew by 1.2% in 2017 and is expected to grow to 3% by 2020.
“Melbourne and Sydney remain the powerhouses of the construction market, contributing over two thirds of the market’s growth in the last financial year.”
Mr Mackey said one of the biggest global trends that will lower the cost of construction is embracing digital technologies.
“As one of the last industries to be impacted, digital in construction will drive up productivity and drive down costs,” he said.