Enhancing Industry Professionalism to Ease Construction Cost Pressures

Anyone following Hong Kong’s public financial situation will know that the city continues to face considerable fiscal pressure in the short term. Among the issues frequently discussed is the high cost of construction. An international organization released a market survey earlier this year indicating that Hong Kong ranks first in Asia for real estate construction costs. A shortage of skilled labor is also cited as one of the city's biggest challenges.

The high construction costs in Hong Kong are not a new issue and stem from multiple factors. One of them is the tight labor market. However, I believe another major contributor is the lack of professionalism in the construction industry, which leads to redundant regulatory oversight. While the complexity of construction projects naturally affects timelines and costs, redundant regulatory and inspection procedures not only prolong approval times but also increase manpower demands. Based on statistics from my company’s construction sites, the ratio of resident site staff to contractor construction teams is nearly 1:1, and the wage cost ratio reaches 1.5:1.

This is not to deny the necessity of regulation, nor should all problems be blamed on government policies. I believe that all industry practitioners—including contractors, engineers, inspectors, and workers—should possess professional qualifications and fulfill their responsibilities with integrity, rather than over-relying on external supervisory frameworks. Only when everyone clearly understands their roles and responsibilities, supported by sound contractual and legal frameworks, can we foster self-discipline and accountability.

It is undeniable that some personnel in the industry currently lack professionalism and experience. For example, when handling design and engineering documents, some merely copy the content verbatim without proper understanding, which affects work quality and necessitates more inspections and supervision. This is also reflected in safety issues, where design, construction, and safety considerations are not adequately addressed, allowing mistakes to go unpunished. Worse still, when project volumes increase, we see aggressive hiring tactics and unhealthy competition, further driving up costs.

Perhaps we can learn from overseas practices to improve work quality. In the U.S., professionals are held accountable for their work and risk losing their qualifications if they fail to perform. During my site visits in Japan, I observed their strict self-governance standards, which allowed them to reduce the number of residential supervisors and helped lower overall costs.

Reducing construction costs is crucial to enhancing the competitiveness and sustainability of Hong Kong’s construction industry. Amid fiscal pressures, this can also help alleviate some public expenditure. At the same time, I hope the government will actively introduce innovative construction technologies, techniques, and materials, and encourage the industry to adopt them while attracting new talent to join the sector.