Nairobi has been ranked the second most expensive city to construct in Africa, after South Africa’s Johannesburg and 86th globally.

According to the latest 2019 International Construction Index published by global design and consultancy firm, Acardis, Nairobi’s construction costs topped other global cities including Beijin, Shangai, Kuala Lumpur and Mumbai.

The index also predicts that the prices for construction tenders in Nairobi will increase between 1% to 3% in 2019.

New York, San Frascisco and Hong Kong took first, second and third place respectively as cities with the highest construction costs globally for the second year running.

Findings from the survey revealed a trend towards convergence of construction costs globally, noting that the total range of costs across the index has decreased by over 10% this year.

Cities were ranked in the report based on five factors. These include cost of living, cost of labour, cost of materials, quality and complexity of projects under construction, and the local dollar rate for specific cities.

“In the face of volatility and uncertainty, through innovation and relentless focus on end-user needs, construction clients can realize outcomes that are market-beating,” said Will Waller, Head of market intelligence at Acardis.

The report also ranked Kenya fourth globally with regard to forecasted overall growth in the value of the construction industry in 2019, after Ireland, Qatar and Phillipines. It estimates that Kenya’s construction industry will grow by about 9% in 2019.

Additionally, the study advocates for increased adoption of technology in the construction industry to reduce costs.

‘For the construction industry, which has been behind the curve, now is the time to fully embrace advancements in technology, as a means of overcoming global economic headwinds, by boosting productivity and cutting costs,’ reads the report in part.

Construction markets have been mainly impacted by regulatory changes, currency fluctuations and the effects of inflation.

The global economy has been on a decline since 2018, with growth coming down to an estimated 3.0% for the year. World Bank forecasts predict 2.9% growth in 2019 and 2.8% in 2020.

With ongoing trade tensions, the World Bank estimates that ‘about 5% of global trade flows would be negatively affected by the implementation of all tariffs currently under consideration.’

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