Brussels has been ranked in the top ten most expensive European capitals for construction, driven by the continued rising price of building materials.
Belgium's largest city is ninth on the list of most expensive European capitals to build in, according to international consultancy and design firm Arcadis' International Construction Costs Index 2022 study. It costs more to build in the Belgian capital than in Dubai.
"The Belgian construction market rebounded in 2021. According to Eurostat data, production grew by 7%. However, the sector has paid a price for the recovery," Rik Menten, Director of Buildings for Arcadis Belgium, said in a statement.
"The limited access to building materials, such as steel and wood, caused many delays. Although these materials are now more readily available, prices are still high."
Rising costs of building materials
Construction costs in Belgium rose by 5.2%, slightly less than in European countries. Aside from the limited access to building materials, their costs have also been rising.
As these costs account for approximately one-third of the total construction cost, their prices rising will continue to result in the entire building process becoming more expensive.
"Many projects are now concentrating on restoring the programme and minimising further budget overruns. Some are now operating at great losses due to the changing market and price and availability of materials," Menten explained.
According to Arcadis, construction costs are not expected to fall in the coming months, due to the impact of higher energy prices. Energy costs account for 38% of total costs for the production of steel and cement, and since the beginning of the conflict in Ukraine, the wholesale prices of gas and electricity have already doubled.
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The switch to more ecologically-friendly construction further added financial pressure to the sector. Since January 2021, a requirement to build only near-zero energy buildings was imposed on the sector, while climate targets have forced builders to abandon fossil fuels and to look for green, high-tech and often more expensive production processes.
"Although the approaching market conditions may seem unfavourable at first glance, we believe that these challenges offer our industry, more than ever, an opportunity to promote innovation and digitalisation and to create a mindset of doing more with less. In this way, we can reduce our own impact on the environment, the raw materials used and, consequently, costs," Menten said.
Global ranking
Globally, Belgium ranked 45th place out of the 100 cities examined by the company, down from 32nd place last year, not because it became cheaper, but because British and American cities have become much more expensive and have risen higher in the ranking.
London and Geneva are currently the most expensive cities worldwide to build, followed by Oslo, New York City and Copenhagen, while costs are lowest in Athens and Istanbul.
