Average cost of Greater Dublin Area home increases over €90,000

by Rachel Cunningham
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The average cost of delivering a three-bed-semi-detached home in the Greater Dublin Area (GDA) has increased by over €90,000 over the last three and a half years, a new report has revealed.

The Real Cost of New Housing Delivery 2023 report by the Society of Chartered Surveyors Ireland (SCSI) estimated that this average cost in Ireland ranges from €354,000 in the Northwest to €461,000 in the Greater Dublin Area, which includes counties Dublin, Wicklow, Kildare and Meath.

The report, which was recently launched at the society’s national conference in Croke Park, found the national average cost of delivering this house type across seven regions by the private sector is €397,000, while the cost is €386,000 when the Dublin region is excluded.

This represents an average increase of 24 per cent compared to the 2020 cost of €371,000 to build the same house and an average increase of 39 per cent since the SCSI published the first edition of this report in 2016, when the cost was €330,500 in the GDA.

The report has attributed the increase largely to a rise in ‘hard costs’, such as house building costs, siteworks and site development, which are up 27 per cent or €49K on average, while ‘soft costs’, including land, development levies, fees, vat and margin increased by 21 per cent or €41K.

A report author and chartered quantity surveyor, Micheál Mahon, identified the impact of Covid and the conflict in Ukraine as the central contributors to the increase in hard costs over the past two years.

These costs range from just over €198,000 in the Northwest region to just over €228,000 in the GDA, representing approximately a 15 per cent differential. 

“The main hard cost drivers have been energy, fuel, and shipping costs. The cost of various building materials, particularly concrete, insulation, electrical and plumbing products, steel reinforcement, and timber products, also increased dramatically,” said Mr Mahon.

“Nationally, hard costs now comprise 53 per cent of the total costs of overall delivery, while soft costs make up the remaining 47 per cent.

“However, in the GDA, this balance shifts to 49 per cent hard costs and 51 per cent soft costs. While cost inflation has increased very significantly in recent years, recent SCSI surveys indicate prices are levelling off.

“Soft costs range from approximately €156,000 in the Northwest region to just over €233,000 in the GDA.

“The primary soft cost drivers have been land costs, financing due to higher interest rates, levies and an uplift in the cost of professional fees.

“On a national basis, land and acquisition costs per unit equate to 13 per cent of overall delivery costs, on average.”

The report also examined affordability from the perspective of a first-time buyer with an average combined salary of €95K taking out a mortgage with the support of the Help to Buy scheme.

This analysis showed that the Midlands and the Northwest are the most affordable regions for purchasing a new home, while the least affordable regions for the average first-time buyer are the GDA region, the Galway region and the Cork region.

The combined minimum salary levels required to purchase a new three-bed-semi-detached house in the GDA is €127K, based on an average 3.3 times Loan to Income Limit. 

Despite the challenges, Mr Mahon said the SCSI’s analysis showed that government supports aimed at addressing viability and affordability are making a noticeable impact. 

The report recommends for more to be done to support modern methods of construction, pause future increases to connection charges and levies and to ensure the planning process is fit for purpose to de-risk development and bring down cost.

“While there has been a significant increase in the supply of new housing towards current Housing for All, it is important that we update those targets considering Ireland’s population increases,” said President of the SCSI, Enda Mc Guane.

“Housing for All targets were based on the 2016 census, and the population has grown by 8 per cent.

“Therefore, targets need an immediate revision based on the most up-to-date census figures.”

The president also recommended a review of the First Homes Scheme purchase price ceilings to ensure the shared equity scheme is accessible to average market values for each county, stating that price ceilings should be adjusted in line with construction inflation to avoid the ceilings becoming inaccessible in the future.

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