€537,000: cost of building an apartment
The cost of building two-bedroom apartments in four major Irish cities has risen to €537,000 for developers, a report has found, writes Joe Rossiter.
This is an increase of 4%-6% over the last five years, according to the Society of Chartered Surveyors Ireland (SCSI).
Development costs for suburban medium-rise apartments rose by 32% in the same period, from €411,000 to €541,000, an increase of €130,000.
The report also found first-time buyers need a combined salary of up to €129,000 to afford the average two-bedroom apartment.
Affordability remains “the key challenge” according to the SCSI, although the report said Government intervention has played a “critical role” in tackling rising costs.
It used data on more than 10,700 apartments in Dublin, Cork, Limerick and Galway.
Paul Mitchell, a chartered quantity surveyor, said cost-rental housing – affordable rented accommodation for those who are above the threshold for social housing but have difficulty affording private rented accommodation – made up half the apartments surveyed for the report.
At the time of the last SCSI report in 2021, cost-rental did not make up any of the housing studied.
The report also found Government interventions are helping construction to become more viable for developers.
It said policies such as the reduction in VAT and Croí Cónaithe, a fund to support the building of apartments for sale to owner-occupiers, made more apartment types financially viable.
Mr Mitchell said the Government would need to introduce extra support in the private rental market to achieve its goal of 300,000 new residential units by 2030.
Real estate agent holding house keys with a new property in the background, representing the concept of homeownership, investment, and mortgage
“We need supply but we can’t build it on our own,” he added.
The SCSI recommended the introduction of a National Housing Bond which could be used to seed housebuilder schemes and give them access to low cost finance.
