• Dublin is the 19th most expensive construction market globally, with an average cost of US$3,708 (€3,409) per m2 – overtaken by Munich (US$3,787 per m2, €3,482) as the most expensive city in the European Union
  • Survey shows European construction markets are seeing slowing investment due to rising costs, and market uncertainty around excessive lead times and labour shortages
  • Construction wages in Dublin remain lower than its European neighbours – averaging at US$47.6 (€43.8) per hour.
  • Data-led study of costs in 89 global markets warns of construction slowdown with rising borrowing costs and worldwide capacity crunch curbs investment. 

Dublin has been ranked as the 19th most expensive city in the world to build in, and the second most expensive in the EU, after being overtaken by Munich (17th), with average costs per m2 averaging at US$3,708 (€3,409) and US$3,787 (€3,482), respectively.

Construction businesses across Europe are reporting reduced activity, as confidence and private investment is hit by steeply rising construction costs, shortages of materials and labour, and difficult financing conditions due to higher interest rates.  However, Ireland is proving resilient and construction is set to grow in 2023, partly helped by relatively low labour costs.  Construction wages in Dublin average US$47.6 (€43.8) per hour, compared to US$52.5 (€48.3) in London, US$81.3 (€74.8) in Munich, and US$120.3 (€11.0.6) in Geneva.

Inflation across Europe is expected to cool significantly this year, with an average forecast of 6.4 percent for 2023 over the 16 European regions surveyed – down from 12.7 percent in 2022.  Dublin’s is forecast to be lower than the average, at 5.0 percent, though still higher than targets.   

The picture across Europe comes in the context of a global construction slowdown, as appetite for real estate investment worldwide is being curbed by a combination of high inflation, labour shortages and rising interest rates that are acting as barriers to project finance.  Turner & Townsend’s latest International Construction Market Survey (ICMS), shows construction sector confidence falling, with high costs starting to impact market appetite.

From a survey of 89 global cities, the US dominates the rankings of the most expensive places to build, with six US cities in the top ten.  New York is the most expensive market, with an average build cost of US$5,451 (€5,451) per m2, and San Francisco following closely behind on US$5,200 (€4,781).  

These figures have been fuelled by the strong US Dollar, but also the impact of Bidenomics – a series of US policy interventions designed to stimulate growth in advanced manufacturing and green technology.  The report points to the impact on the President’s Inflation Reduction Act, which focuses on supporting green industries, as driving investment in secondary markets across the US.

Switzerland and Japan continue to be expensive countries in which to build. Geneva (US$4,662 per m2, €4,286) and Zurich (US$4,653 per m2, €4,278) place third and fourth respectively with Tokyo (US$4,576, €4,207) and Osaka (US$4,497, €4,134) ranking in fifth and sixth. Both Hong Kong (US$4,292, €3,946) and London (US$3,879, €3,567) have dropped out of the top ten ranking for the first time, overtaken by US markets. 

Our data indicates falling sector confidence worldwide in the face of continued cost increases, fears of insufficient credit availability, and a persistent labour crisis.  74.2 percent of global markets show a ‘skills shortage’ in the report.

Philip Matthews, Managing Director, Ireland at Turner & Townsend said:  “The construction industry in Europe and beyond faces headwinds on multiple fronts.  Against a backdrop of rising costs of construction, higher interest rates, and market uncertainty, Ireland is proving more resilient than many of its counterparts.  But this must not make us complacent.  Clients need to keep close to supply chains and work with them to highlight and mitigate any risks as early as possible and ensure delivery pipelines can be met.”

Ranking (/89 markets)Cost per m2 (US$)Cost per m2 (€)2022 inflation (%)2023 inflation (%)Wages / hour (US$)Wages / hour (€)
Stockholm293,127 2,87511.04.050.946.8
Regional average3,3233,05512.76.465.760.4