EC Harris reports strong cost rise in eastern Europe over the past year
Building costs have risen by as much as 30% in eastern European markets such as Poland and Bulgaria over the past year, according to the latest research from EC Harris.
The consultant’s annual global building costs survey shows that parts of eastern Europe are continuing to experience double-digit tender price inflation, partly fuelled by the enlargement of the EU. The research also shows that even in countries such as Serbia and Hungary, which have particularly low construction costs, prices are still almost twice those of Indonesia, Malaysia and Taiwan.
The UK is the fifth most expensive place in the world to build, with costs 20% higher than France and Germany. Denmark is the most expensive country, followed by Switzerland, Ireland and Sweden.
However, the research shows that cost escalation in western Europe is slowing down. Mike Pearce, EC Harris’ head of the property sector in Europe, said: “As the full repercussions of the US credit crunch begin to play out worldwide, the long-term effects for the construction industry remain uncertain.
“Building cost escalation in western Europe, the US, Australia and Japan is showing a marked slowdown, especially in the private residential and commercial sectors, where investors are increasingly cautious.”