Global Construction Costs Surge Amid Shifts in Building Material Prices

In recent months, the world has witnessed significant changes in the real estate and construction sectors. A new report by the Global Real Estate Monitor reveals that construction costs have increased by more than 15% worldwide compared to the same period last year.

This dramatic rise is primarily due to three key factors: the increasing cost of materials such as steel, cement, and bricks; supply chain disruptions caused by international conflicts and trade disagreements; and the rising interest rates from banks, making loans more expensive for developers. These factors have created major challenges for real estate investors, particularly in developing countries where affordable housing is already scarce.

In major cities like Dubai, New York, and Shanghai, developers are reevaluating their strategies. Some have paused large-scale construction projects, while others are shifting focus to more cost-effective and low-rise buildings. In Africa, countries such as Nigeria and Kenya are seeing dramatic increases in construction expenses, with some materials rising by up to 40% since January 2025.

Analysts warn that if this trend continues, housing affordability in urban areas will deteriorate further, leading to broader socio-economic impacts. However, there is hope that coordinated global efforts — such as reducing tariffs on construction imports and easing lending conditions — could help stabilize the market.