A major report by the Society of Chartered Surveyors Ireland (SCSI ) has found that Galway is one of the most viable regions for delivering a new three-bedroom semi-detached house in a multi-unit scheme in Ireland. The two areas where the construction of a new 3-bed-semi is most viable on average is Galway and the Greater Dublin Area.
The report 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.
The SCSI’s ‘The Real Cost of New Housing Delivery 2023’ report, which was launched at the SCSI’s national conference in Croke Park on December 7th.
Using average market value data of new three-bedroom semi-detached properties across the various regions, the report assessed the financial viability of new home building in different parts of the country. Financial viability is determined by subtracting market value from overall delivery costs.
The research shows that financial viability, on average, is most challenged in areas of lower market values. The region where this challenge is greatest is in the Midlands region, where the average viability gap is €52K, followed by the Cork region, €50K and then the Northeast region, €45K. The two areas where the construction of a new three-bed-semi-detached home is most viable on average is Galway and the Greater Dublin Area.
The report says the average cost of delivering a three-bed-semi-detached home in the Greater Dublin Area (GDA ) has increased by over €90,000 to €461,000 over the last three and a half years.
This is an average increase of 24% on the €371,000 it cost to build the same house in 2020 and an average increase of 39% since the SCSI published the first edition of this report in 2016 when the cost of building an average 3-bed-semi was €330,500.
According to the report, the increase over the last three years in the GDA has been largely driven by a rise in ‘hard costs’ (bricks and mortar ), which are up 27% or €49K on average. While ‘soft costs’ (land, development levies, fees, vat, margin ) increased by 21% or €41K.
Chartered Quantity Surveyor Micheál Mahon, one of the report’s authors, said the impact of Covid and the conflict in Ukraine have been the main contributors to the increase in ‘hard costs’ over the past two years.
