Brussels ninth most expensive capital in Europe to build
Brussels is in ninth place in the list of most expensive European capitals to build in. This is apparent from the International Construction Costs Index 2022, a study by the international consultancy and design agency Arcadis. Worldwide, Brussels ranks 45th out of 100 cities surveyed. It costs more to build in the Belgian capital than in Amsterdam and even Dubai, but the cost to us is less than many other places. Despite all the selling the construction sector in our country reached 7%.
The trend has been going on for some time. The prices of building materials are permanent throughout the year. Wood, steel and insulation materials in particular have become more expensive. Materials make up about a third of the total construction cost, depending on the construction type. A logical consequence is that the entire construction process is becoming increasingly expensive. Arcadis international research trends. Construction costs in Belgium have increased by 5.2 percent and in other countries the increase is in line with European countries. London and Geneva are the most expensive places to build, while Athens and Istanbul have the lowest costs. Globally, Brussels is in 45th place, which is lower than 32nd place a year earlier. That does not mean that Brussels has become cheaper, but that British and American cities in particular have become much more expensive and many places have risen in the ranking.
According to Eurostat data, production grew by 7 percent. The sector has paid a price for the recovery. Limited access to building materials, such as steel and wood, has caused many delays. Although these materials are now available, prices are still high. Many projects now focus on the recovery of the program and the intense of further budget overruns. several now operate at great losses due to the changed market and price and availability of materials. On existing projects, contractors are performing at higher costs than the value of contractual cost adjustments. Companies therefore review many current contracts and look for new agreements to spread the risks, for example through collaborations.
Rik Menten, Director Buildings Arcadis Belgium
Specific materials for custom building
Arcadis, in construction cost management, does not expect construction costs to fall over time. The impact of higher energy prices will continue to be felt. In the production of steel and cement, energy costs account for 38 percent of the total production costs. Both producers and customers will take into account uncertainties about the price of energy this year. Since the start of the conflict in Ukraine, wholesale gas and electricity prices have already doubled. Analysts do not venture to make predictions about the future evolution for the time being.
In addition to the intense overall waiting for the sector, there are still more transactions that have an impact on the construction cost. The effects of the war in Ukraine are not yet clear. But there is no doubt that the energy will remain and that the prices of materials are under pressure.
Also plays a part in the price increase: since January 2021 to only build almost energy-neutral. Just like the goals, those gentlemen continue to build on fossil fuels and look for energy sources. By 2030, there must be 55 percent less CO2 emissions.
The construction has proven to be robust over the past year, withstanding the toughest of passenger conditions. Even now, the sector will succeed with lean interventions and the right expertise to do more with fewer materials. Increasing investments in digital solutions and modern construction methods can improve efficiency as well as sustainability. While the approaching market conditions may appear unfavourable, we believe this opportunity offers our industry more than ever before to drive innovation and digitization and 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 therefore also the costs.
Rik Menten, Director Buildings Arcadis Belgium
The Arcadis International Construction Costs Index compares one hundred world cities from all six continents in terms of construction costs. In order to make a comparison between the cities, the costs are incurred, Amsterdam also being 100. In addition to the comparison between the cities, the report also provides financial resources in the construction market and involved market parties.