Surveyors call for national housing bond to tackle scheme viability and affordability

Series of recommendations after report on real costs of apartment delivery

The Government has been urged to introduce a National Housing Bond to give smaller housebuilder schemes access to low-cost financing.

The Government has been urged to introduce a National Housing Bond to give smaller housebuilder schemes access to low-cost financing.

The recommendation is one of a number from the Society of Chartered Surveyors Ireland (SCSI) - others include a scheme for contaminated sites in urban areas to be reclaimed and brought into residential use - to improve construction viability and affordability in Ireland.

The recommendations come on the back of an SCSI report entitled 'The Real Costs of New Apartment Delivery 2025', based on data covering over 10,700 apartments in Cork, Dublin, Limerick, and Galway. 

The report said targeted interventions by Government are addressing the financial viability gap for the construction of new apartments - but affordability for buyers remains a massive issue.

'Viability' was based on a 15% gross margin/risk financing hurdle, with projects below this line deemed financially unviable for developers. 

Total development costs increased across categories of apartments researched by the SCSI between their 2021 report and 2025. The cost of delivering a suburban medium rise apartment increased by 32%, from €411,000 to €541,000.

However, Paul Mitchell, a chartered quantity surveyor and one of the co-authors of the report said the findings show that a more standardised apartment typology is starting to emerge.

“While the cost of what was the cheapest apartment to build has increased by the most, the cost of the more expensive apartments has eased considerably," said Mr Mitchell. "In practical terms this means the variation in cost per sqm has narrowed across all apartment types to between €2,600 to €3,150 per/sqm where previously it was €1,850 to €2,850.”

The Government introduced measures to reduce the viability gap for apartment developments, with reduced Vat on sales (from 13.5% to 9%) and the Croí Cónaithe support scheme introduced in June, which supports the building of apartments for sale to owner-occupiers.

Mr Mitchell said Government policies are helping to bridge the financial viability gap. The SCSI called for Croí Cónaithe to be extended beyond the five National Planning Framework cities - Cork, Dublin, Limerick, Galway and Waterford - to other regions. 

Affordability challenges persist. To afford a new two-bedroom apartment, a first-time buyer couple would require a minimum salary of at least €108,000 without Government supports, or €84,000 if they can utilise the First Home Scheme, which only applies to properties below a €500,000 sales price threshold.

"We believe the Government needs to build on what they have achieved to date and extend levies and Úisce Éireann waivers, including section 49 (development) levies. Foreign investment is vital for the private rented sector, and we believe the Government needs to investigate a time limited commercial package to kick-start this sector.”

The SCSI also called for a  ‘Brownfield Remediation Relief’ scheme to enable contaminated sites in urban areas to be reclaimed and brought into residential use. It reiterated a call for a National Housing Bond – "a type of SSIA for housing – which could be used to seed SME housebuilder schemes and ensure they have access to low-cost financing".