Construction costs are adding to the prices of new-builds, say surveyors

A new report from the Society for Chartered Surveyors in Ireland (SCSI) shows that construction tender prices have risen by 2.6% in first half of 2017. 

Construction tender prices have risen by 2.6% in first half of 2017.

Furthermore, surveyors predict prices will rise by a further 3.6% in second half of the year. This would lead to a total estimated increase of 6.2% over the year, on top of a 6.3% increase in 2016. It is a continuation of an upward trend that has been in evidence since 2011. Construction costs have an obvious knock-on effect on new home prices. The report estimates that the current rises will bring average house prices countrywide back to levels last experienced in 2004. As expected the highest rise is in the Greater Dublin Area (GDA).

The society has already warned that, failing the government entertaining “a range of radical and potentially unpalatable policies”, it is likely that Ireland will not meet the demand of 35,000 homes required to satisfy current housing market demand until 2026. One of the policies it has suggested, is reducing the VAT rate – a measure which would obviously be resisted by the exchequer. The government has committed to building 3,000 new social housing units by 2018, but given supply constraints SCSI are witnessing on the ground, it cannot see how these will be delivered.

Chairman of SCSI, Kevin James, says: “The increased level of construction activity is leading to a shortage of resources across multiple trades for both main contractors and specialist sub-contractors while exchange rate fluctuations between the Euro and Sterling due to Brexit have also increased the cost of some materials. Looking ahead the increasing pressure for wage increases in the industry will also drive tender prices higher.” In a separate report into national house prices by REA, it has found that central city prices in Cork and Waterford have remained largely static since June, but are gaining markedly in the commuter belt. Limerick city has shown growth of 2.7% over the quarter.

REA Celtic Properties also claims Brexit is having an unusual effect on the rental market in West Cork. Former Sterling buyers are now opting to rent on a long-term basis, creating added pressure on an under-supplied market.

More in this Section

Stunning vistas sure to draw inspiration in Kinsale

City chic at Kyle Street

Dreamt you dwelt in marble halls?

House of the Week: Rushbrooke, Great Island, Cork Harbour


Breaking Stories

Cork County Council place flood barriers, warn of likely road closure

No 'budget bounce' as Fine Gael and Fianna Fáil slip in opinion polls

The Lotto results are in

Here's the weather outlook following Storm Brian

Lifestyle

A helicopter put a piano on the 150-foot roof of Blarney Castle and other stories from the Cork Jazz Festival archives

Jazz Memories: Famous faces share their favourite moments

Live music review: The Horrors - Icy genius in a thrillingly intimate setting

New book revisits the games they just don't make anymore

More From The Irish Examiner