Construction cost of buildings per square meter in China 2013-2023

In 2023, the average cost of completed buildings per square meter in China was 4,150 yuan. It was a significant uptick compared to the previous year. The real estate industry played an important role in China’s economy and had been one of the main drivers of the country's economic development. 

Building costs

Construction costs vary greatly among the different regions in China. In Shanghai, the cost of construction was the highest in the country. Construction cost is determined by many factors but one main driver of increasing costs was the price of land lease. In China, all land belongs to the state and private entities can only purchase a lease of land for 70 years. After the abolishment of the business tax, which constituted an important revenue source for local governments, local governments relied even more on income from selling land leases.

Labor costs

Besides an increase in the cost of land, labor has also became more expensive. The construction industry has long depended on migrant workers and exploiting the wage disparities between rural and urban areas. Thereby it has been common for agencies recruit workers from underdeveloped areas to work on construction sites in larger cities. For many rural inhabitants, this constitutes a valuable income opportunity. Over the past decade, however, wages of domestic migrant workers had increased significantly driving up constructions costs as a result.