Hong Kong, 30 July 2026 – Arcadis (EURONEXT: ARCAD), the world’s leading company delivering data-driven sustainable design, engineering and consultancy solutions for natural and built assets, announced the Hong Kong and Macau results from its 2026 International Construction Cost Index (ICC). Hong Kong ranks 16th globally, while Macau ranks 21st among 100 major cities surveyed worldwide.
Globally, Geneva retained its position as the world’s most expensive city in which to build, followed by London and Zurich. The index highlights that high-cost construction markets remain concentrated in mature cities where strong demand coincides with constrained delivery capacity.
Hong Kong ranked 10th in the 2025 Index. Hong Kong's shift in rankings reflects a unique market environment. Hong Kong is one of only two markets globally experiencing construction cost deflation, alongside Chinese Mainland. Construction prices in Hong Kong deflated by 1–2%. In addition, the continued weaker sentiment in the residential and commercial property sectors has reduced the volume of new private-sector projects, intensifying competition among contractors and resulting in more competitive tendering conditions and relatively contained input cost movements. This contrasts with construction cost inflation of approximately 3–4% in the United States and 2–3% in the United Kingdom and across European markets.
In addition, as the Hong Kong dollar is pegged to the US dollar, the depreciation of the US dollar against European and British currencies led to higher US-dollar-denominated construction costs in those markets, lifting their rankings relative to Hong Kong. Despite broadly stable construction costs, Macau also shifts in the rankings, from 15th to 21st, due to its indirect peg to the US dollar through the Hong Kong dollar.
Hong Kong's lower ranking should not be interpreted solely as a reflection of weaker market demand. The city's ongoing transformation of construction delivery is supported by High Productivity Construction (HPC), including Modular Integrated Construction (MiC) and Multi-trade Integrated MEP (MiMEP), broader digitalisation initiatives, and more progressive procurement and contracting approaches which include greater emphasis on collaborative contracting, early contractor involvement, alliancing principles and more integrated project delivery models, is also helping to improve productivity and enhance cost certainty and strengthen long term resilience of Hong Kong’s construction sector.
The latest shift in rankings reflects a changing competitive position within the global construction landscape. However, lower relative construction costs do not necessarily translate into simpler project delivery. Clients continue to face challenges including elevated financing costs, supply-chain constraints, energy price volatility, and the increasing technical complexity of assets such as healthcare facilities, laboratories, data centres and advanced manufacturing facilities.
William Fong, Head of Cost and Commercial Management, Hong Kong and Macau, Arcadis, said:
"While the ICC 2026 report identifies real estate market weakness and construction cost deflation as the primary drivers behind Hong Kong's six-place shift in the global rankings, the increasing use of industrialized construction methods also contributes to a more efficient delivery environment. The six-place shift in Hong Kong's ranking reflects both cyclical market factors and structural industry transformation. While reduced development activity has contributed to construction cost deflation, ongoing investment in MiC, MiMEP, digital construction and more progressive procurement and contracting approaches is helping the industry improve productivity and resilience, positioning Hong Kong for more sustainable long-term growth."
