Hong Kong
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Hong Kong has surpassed Tokyo as Asia’s most costly metropolis to construct property as rising building costs add to a worsening labor crunch, a new market survey launched by Turner & Townsend confirmed.
The UK-based property consultancy projected that Hong Kong’s common building price this 12 months will rise 4.8% to $4,500 per sq. meter, rating it ninth globally out of 91 cities surveyed.
Solely cities within the U.S. and Switzerland ranked increased, with New York Metropolis in first place at $5,723 per sq. meter, adopted by San Francisco at $5,489 and Zurich at $5,035.
“Expert labor scarcity and regular home building demand are key influencing components behind Hong Kong’s rating in our ICMS this 12 months,” mentioned Sumit Mukherjee, head of actual property, Asia at Turner & Townsend.
The survey recognized a scarcity of expert labor as Asia’s largest building problem extra broadly.
This has been very true in Hong Kong, with town’s building trade going through a manpower scarcity as town grapples with an growing older inhabitants.
Based on the Hong Kong Building Business Council, this expert labor hole is predicted to achieve as excessive as 40,000 folks by 2027.
Final 12 months, the Hong Kong Census and Statistics Division projected that Hong Kong’s growing older inhabitants would worsen amid low fertility charges final 12 months.
A couple of in each three residents is predicted to be 65 or older by 2046, driving down the general labor power participation fee, it mentioned.
In the meantime, consultancy agency PWC mentioned final 12 months that town’s “vital labor scarcity” was additionally a results of a surge in emigration and international competitors for expertise. Authorities measures geared toward attracting and retaining international and home expertise had been doing little to assist the issue as of September.
Macao, one other particular financial zone of China, ranked 2nd place in Asia and twelfth place globally, with a mean building price of $4,269 per sq. meter.
In Japan and China
Cities in Japan typically grace the highest of the ICMS rating for building price, Turner & Townsend mentioned, with the nation continually strained by the nation’s growing older inhabitants and longstanding labor scarcity.
Nevertheless, not one of the Japanese cities made it to the highest 10 international rating in Turner & Townsend’s 2024 survey, though Tokyo was third within the Asia rating, adopted by Sapporo, Osaka, Hiroshima, and Fukuoka.
This was because of the devaluation of the Japanese yen, with the financial system experiencing solely reasonable development following the pandemic, Mukherjee mentioned.
Towards the underside of the development prices survey had been cities in mainland China with an considerable labor power serving to maintain building prices low, in response to the consultancy group.
A festering actual property disaster has additionally despatched China’s building trade to a close to standstill, miserable demand and prices, it added.
“The Chinese language authorities’s response to its financial challenges shouldn’t be but clear, making the way forward for the market unpredictable and dampening funding confidence,” the report mentioned.
