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US cities dominate most expensive places in the world to build list
09 July 2025
The world’s most expensive cities to build in have been estimated in a report by construction consultancy Turner & Townsend.
A global squeeze on skilled labour is keeping construction costs high – with five US cities now among the world’s most expensive. Image: Adobe Stock
In the Global construction market intelligence report 2025 the US maintains a strong hold on the top rankings of the most expensive places to build with five US cities in the top ten.
New York is in first place, with an average cost of US$5,744 per m², followed by San Francisco at US$5,504. Then comes two cities in Switzerland, Zurich and Geneva, before London in the UK rounds out the top five.
Los Angeles, US, is sixth, with Chicago, US, seventh and Tokyo in Japan eighth. The top ten is completed with Philadelphia, us, in ninth place and Sapporo in Japan tenth.
The US features so heavily in the top ten due, in part, to high construction labour costs, averaging at US$76 per hour, and rising as high as US$131.4 per hour in New York. This is being fuelled by a construction skills shortage of key specialists, as 87% of North American markets report shortages of mechanical, engineering and plumbing trades.
This is part of a wider global picture of demand for skilled labour outstripping supply, exacerbated by moves in many regions to restrict migration. Just over 70 of 99 markets in the report declare that they’re experiencing a skills shortage, and this is helping keep average construction inflation above target – forecast to be 3.8% for 2025 and 4% in 2026.
As well as the impact of elevated wages as seen in the US, costs in Western Europe and the UK are being kept high by strong construction demand as global investment seeks the relative stability of the region and domestic governments aim to accelerate industrial and defence capabilities.
“We’re seeing shifting priorities and challenges across the globe. Geopolitical tensions and increasing polarisation are changing where and how investment flows. However, while uncertainty is limiting confidence in some regions, it is creating opportunities in others,” said Neil Bullen, managing director, global real estate, at Turner & Townsend.
“Whether businesses are making tactical moves to reorient supply chains, or pivot to invest in high-growth sectors like defence, advanced manufacturing and data centres – construction remains crucial to global resilience and growth.
“Despite signs of increasing price stability and renewed activity in construction, we’re seeing a worldwide skills shortage that could put the brakes on growth. International labour could become less mobile as barriers to migration emerge, furthering adding to long-term dwindling of talent pools.”
The world’s ten most expensive cities to build in, according to Turner & Townsend:
New York City, US
San Francisco, US
Zurich, Switzerland
Geneva, Switzerland
London, UK
Los Angeles, US
Chicago, US
Tokyo, Japan
Philadelphia, US
Sapporo, Japan
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