Affordability gap for 3-bed semi home 'widens to €25,000'

The cost of building a three-bedroom private home in the Dublin area has climbed 12% in the past four years to €371,000, widening the affordability gap for buyers
Affordability gap for 3-bed semi home 'widens to €25,000'

Micheál Mahon, the new president of the Society of Chartered Surveyors Ireland said the housing crisis will continue "until the critical balance between affordability for consumers and viability for developers is addressed." Picture: File picture

The cost of building a three-bedroom private home in the Dublin area has climbed 12% in the past four years to €371,000, widening the affordability gap for buyers and meaning the Government will find it difficult to build the number of houses it wants to solve the housing crisis, according to the Society of Chartered Surveyors Ireland.

The industry group said the increase in "hard costs", which involve building out sites such as drainage, water connections, and paving, have driven the overall increase, which it attributes to new regulations and labour costs.

"Soft costs" which include land and acquisition costs, Vat, and the profit margin for builders, have also increased. 

The cost rises have helped to widen the "affordability gap" to €25,000 for a couple earning an average wage wanting to buy a three-room semi-detached new home.  

It says that building socially-owned homes cost up to €230,000 and it calls for a major programme to build public sector homes. 

The group wants any new Government-appointed commission to focus on the tax costs and the costs of public procurement, as well as affordability. 

"The Covid-19 cost is a new factor that has not been captured in the overall delivery cost figure," said Micheál Mahon, the new president of the surveyors' group. 

He said the housing crisis will continue "until the critical balance between affordability for consumers and viability for developers is addressed".

"As a result of new health and safety protocols the costs associated with social distancing and the provision of PPE gear and associated hygiene facilities will have to be borne by the sector. 

The SCSI plans to report on this cost element when sufficient data is available," he said.

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