Society of Chartered Surveyors Ireland publish new cost of housing report

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Society of Chartered Surveyors Ireland publish new cost of housing report

A major new report has found that the cost of building a three-bedroom semi-detached house in the Greater Dublin Area has increased by €41,000 over the last four year and now stands at €371,000. This is an increase of 12% or 3% averaged over the last four years.

The Main Findings:

  • The average cost of building a 3-bed semi in Greater Dublin Area is €371K
  • Costs have increased by €41K in last four years
  • Construction or hard costs come to €179K, 48% of total
  • Soft costs - land, margin and VAT etc make up €192K or 52%
  • Over the last 4 years, hard costs have increased by 19% while soft costs have increased by 7%
  • Cost of site development works and new regulations cited as significant factors
  • Affordability gap for a couple on the average wage trying to buy a new 3 bed semi is €25K+
  • Surveyors call for establishment for a Commission on Housing to review the tax treatment of new housing and the cost impacts of public procurement and new regulations
  • Cost of delivering social housing is between €210 to €230K
  • Society calls for commencement of largescale public sector house building programme

The Society of Chartered Surveyors Ireland, which published the report, says the increase has been largely driven by an increase in ‘hard costs’ – bricks and mortar – up 19% or €29K while ‘soft costs’ – land, development levies, fees,  vat, margin – increased by just 7%  or €12K.

The Real Cost of New Housing Delivery 2020’ – which is based on a detailed study of 30 live sites in the Greater Dublin Area - found that ‘hard costs’ came to €179K, which at 48% is less than half of the overall cost of providing a new house.

The report identifies a number of contributory factors for the increase in hard costs including the introduction of new building and compliance regulations as well as increased labour costs and general inflation.

Land and acquisition costs of €61K (16%) VAT of €44K (12%) and a margin of €44K (12%) make up the main elements of the soft costs which total €192K or 52% of the total cost.

The most significant increases on the construction side are associated with higher costs for site development works such as drainage, water connections, landscaping and paving. On average the cost of siteworks is approximately €40,000, an increase of over 43% since 2016. Structural costs increased by more than 15% - more than €7,400 per unit - due to the costs of increased fire regulations and additional supports.

When the SCSI conducted its first study in 2016, soft costs made up 55% of total costs while hard costs comprised 45%.

Article Published: 31/07/2020