THE REAL COST OF NEW HOUSING THE SCSI’S ‘REAL COST OF NEW HOUSE DELIVERY’ 2020 ANALYSES AND EVALUATES REAL MARKET DATA ON 30 LIVE PRIVATE RESIDENTIAL DEVELOPMENT SITES IN THE GREATER DUBLIN AREA.
Delivery versus affordability Four years on from the SCSI’s first housing delivery cost report, affordability remains a fundamental issue. The working group
Average cost of delivering a three-bedroom semi-detached property in:
compiled a case study based on an average salary in Dublin and lending capacity based on Central Bank rules. The results depict an affordability gap of €34,000 for first time buyers. The working group examined potential measures and the
2016
2020
€330,493
€371,311
12%
results if certain measures were adopted: Cost reduction Reduction in finance costs from 9% to 5%
-€10,000
Development levies and Irish Water connection charges reduced by 30% -€5,000 -€23,500
If these measures were to be implemented, the delivery cost
7%
Hard costs 2020: 52%
€192,409
19%
Since 2016
-€8,500
Total reduction
€178,902 Since 2016
10% reduction in land prices
Soft costs 2020: 48%
achieved would be €347,500, which would effectively close the affordability gap for the average first time buyer.
Outlook for the sector Delivery of housing remains a challenging task where viability
Hard costs: bricks and mortar, external works and site development works.
and affordability need to be equally balanced. Key areas have been identified where cost reductions could be achieved such
Soft costs: professional fees, local authority
as reduction in land costs, finance costs, and the cumulative
contributions/development
impact on lower VAT charges as a result. It is clear, however,
acquisition, sales and marketing, finance,
that there is no one solution and a number of measures are
developer’s margin and Value Added Tax.
levies,
land
required to address an obvious viability and affordability issue. Covid-19 has also brought costs to the sector and this is not
Generally the increases in the delivery cost can be
factored in the Report.
categorised into general labour and material inflation and compliance costs associated with
THE LAST WORD Kevin Brady Director, Andrew P Nugent & Associates
34
SURVEYORS JOURNAL Volume 10, Issue 3, Autumn 2020
regulatory changes in standards. The report solely addresses the costs of delivering a three-bedroom semi-detached property, and does not capture costs associated with abnormal site conditions or Covid-19. The full report is available at www.scsi.ie.
