Singapore construction costs persistently high, expected to climb further in 2027: JLL

Detailed summary

They notch a 30.2% increase since 2021; land constraints add to pressures for industrial and logistics projects

They notch a 30.2% increase since 2021; land constraints add to pressures for industrial and logistics projects

[SINGAPORE] Persistently high construction costs in Singapore continue to be a red flag for developers, with costs up 30.2 per cent since 2021 and set to climb further with imported material prices, labour constraints and land scarcity weighing on projects.

Tender price inflation is forecast to increase by 2.3 to 3.3 per cent in 2027, easing from an estimated 2.5 to 3.5 per cent this year, according to global consultancy JLL.

The slower pace of increases comes after five years of steep cost escalation, with construction inflation significantly outstripping the 17.7 per cent rise in consumer prices over the same period.

JLL’s Global Construction Costs Index 2026 report attributed the sustained pressure to a combination of geopolitical disruptions and supply chain vulnerabilities.

It also identified skilled labour shortages and rising demand for specialised facilities such as data centres and advanced manufacturing plants as contributing factors.

Singapore is particularly exposed to global price movements because of its near-total reliance on imported construction materials, said Shweta Choudhari, director of work dynamics research for the Asia-Pacific at JLL.

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“Energy price volatility, transportation disruption and base materials costs all feed directly into regional tender prices,” she said, adding that contractors were increasingly pricing geopolitical uncertainty into projects as a permanent risk premium rather than a temporary measure.

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