René Muschter
Research Expert covering Industry & Mobility
Construction costs in Europe - statistics & facts
The growth of construction costs for new residential buildings in Europe remained moderate in 2025, following several years, particularly between 2021 and 2023, in which construction costs soared across the continent. To determine the costs contractors will incur, they need to know the price of the components needed to erect a building. Many elements can affect the final price, such as workers' salaries, construction materials, equipment rental fees, or land prices. Those components explain the varying costs of constructing a building across European cities, with cities such as Zurich among the most expensive.
Material prices stabilizing, but not uniformly
Between 2020 and part of 2023, supply chain disruptions, rising energy prices, inflation, and a volatile construction sector affected the price of building materials, which in turn increased the overall construction costs. However, construction costs started falling, to some extent, in 2023, and particularly in 2024. In 2025, most construction material prices in Germany continued to stabilize, with cement rising by just 0.32 percent and lime and burnt gypsum increasing by 1.6 percent. Steel and iron products, however, kept declining, with pig iron and ferroalloys falling by over six percent. Still, those prices can be quite different in each European country. In 2024, the price of building materials in Italy fell slightly, with lime and plaster declined by about 2.1 percent while cement prices declined as well.
Labor and infrastructure costs on the rise
Beyond materials, labor remains a significant cost driver. The gross wages and salaries index in the EU's construction industry reached 128.8 points by the end of 2025, reflecting a nearly 29 percent increase since 2021. Civil engineering hasn't been spared either: the infrastructure construction price index for roads in Germany climbed to over 139 points in 2025. Meanwhile, development land values in the UK have moved in the opposite direction, with urban land prices declining year-over-year as of early 2026. Non-residential projects also add to the picture: office fit-out costs across Europe ranged widely in 2026, from under 1,000 euros per square meter in cities like Belgrade to over 2,600 in London.
Rising expectations despite cost stabilization
Despite the slowdown, the construction price expectations index in the EU climbed in early 2026, signaling that a growing share of firms anticipate further price increases. While material costs have largely stabilized, rising wages and persistent infrastructure spending suggest that overall construction costs in Europe are unlikely to retreat significantly in the near term.
