Dublin Ranks Fourth Most Expensive City in Europe to Build

  Ireland’s capital also makes it into the top 25 most expensive places to build globally

Dublin, Ireland – Turner & Townsend is optimistic about Ireland’s construction market as it begins to recover and move towards green investment opportunities. Despite ongoing geopolitical challenges in Europe, Ireland’s unique position in the post-Brexit landscape and a cooling inflation rate have created a favourable environment for growth.


The International construction market survey (ICMS) 2024 report, from global professional services company Turner & Townsend, shows Switzerland remains the most expensive country to build in across Europe with Zurich and Geneva named in the top 5 most expensive cities worldwide. Based on a global survey of 91 cities, Zurich is now the most expensive place to build in Europe, with an average cost of US$5,035 per m2, up 8.2 percent on the year. Geneva averages US$5,022 per m2 with Munich ($3,797 per m2), Dublin ($3,775 per m2) and Vienna ($3,615 per m2) following, and all ranked in the top 25 globally.


The International Monetary Fund (IMF) forecasts a GDP growth of 1.5 percent and 2.5 percent for Ireland in 2024 and 2025 respectively, positioning it ahead of many European counterparts. This resilience is largely attributed to Ireland’s strategic market position and relatively lower impact from the Ukraine conflict. As a result, Ireland is expected to experience economic expansion, providing opportunities for construction, industrial development and green investment.


Dublin’s Construction Landscape


Dublin continues to see robust investment in both private and public sector housing projects, driven by an acute rental shortage. The average cost for apartments in the capital stands at US$3,666.9 per m², reflecting strong construction demand. Specialist rental accommodations, such as student housing, are also expanding. Across the region, green investment is becoming increasingly important as carbon priorities shape development strategies. Significant commitments towards net-zero carbon are evident in major projects across Paris, Brussels, and Amsterdam, driven by stringent government regulations and rising consumer expectations.


Across the 15 European cities surveyed, including Dublin, labour costs average $68.6 per hour – boosted by the highs of Geneva ($125.2) and Zurich ($124.9) who lead the continent.


A significant factor driving inflation worldwide is a scarcity of skilled labour. A staggering 79.1 percent of markets, representing 72 individual markets, reported skill shortages. This stands in stark contrast to just 9.9 percent, or 9 markets, with a labour surplus. The remaining 11 percent, or 10 markets, indicated a balanced labour market. This imbalance between supply and demand for skilled workers is putting continued upward pressure on construction costs globally.


In the face of potential labour bottlenecks across Europe, Turner & Townsend is advising clients to prioritise identifying the right procurement strategies and to work collaboratively with the supply chain to mitigate the risk to delivery.


The data points to lowering construction price inflationary pressure overall. Turner & Townsend has modestly reduced its 2024 construction cost inflation forecasts compared with last year’s predictions. Construction inflation in most markets is driven by a backlog of projects, which are gradually moving forward as construction costs stabilise.


Philip Matthews, Managing Director of Turner & Townsend in Ireland, comments:


“After several years of economic turbulence and the significant impact of the ongoing conflict in Ukraine, it is encouraging to see emerging opportunities within the European construction sector. With a 1.5 percent GDP growth forecast for 2024, Ireland is positioned as an outlier compared to the Euro area’s sluggish 0.8 percent growth. This resilience is due, in part, to Ireland’s active, post-Brexit market, which has been less impacted by the Ukraine conflict than many of its European neighbours.


“We are observing heightened activity across various industries; Dublin in particular has been buoyed by investment into both private and public sector housing developments on the back of the ongoing rental crisis. Nonetheless, we must remain vigilant regarding the rising cost of labour across the continent.


“Furthermore, the increasing emphasis on sustainability requirements for real estate portfolios is likely to alter investment patterns and asset values. Going forward, it will be essential to carefully evaluate contract models and carbon costs to effectively mitigate risks.”


Across Europe: With the Olympics approaching, leisure investment is on the up, especially in Paris ($3,200 per m2), where increased demand has caused the French capital’s cost escalation to increase by 0.1 percentage points to a forecast of 2.5 percent.


Furthermore, data centres and advanced manufacturing have seen booming demand across Europe with the EU’s Net Zero Industry Act looking to promote investment. Demand is driving up prices with an advanced manufacturing facility in Amsterdam now costing $3,840 per m2.


Globally: The ICMS report’s survey of 91 global cities shows the US continuing to dominate the rankings of the most expensive places to build, with six US cities in the top ten. New York has retained its position as the most expensive market to build in for the second year running at an average cost of US$5,723 per m2.


Worldwide deglobalisation trends and nearshoring prompted by supply chain disruption and geopolitical tensions are seeing growth and investment in manufacturing, especially in emerging international markets such as Malaysia, Indonesia, Nigeria, Brazil and Mexico.


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