Site costs rocket from 15% to 45% of house price

SITE costs have spiralled from between 10% and 15% of the overall house price before the boom, to anything from 40% to 45% today.

The only way of tackling site costs and ultimately house prices is to separate development and property rights and auction development or betterment rights for an area, a leading economic consultant has urged.

Variable length planning permission should also be granted, Jerome Casey said, to ensure building actually occurs and neither developers nor land owners sit on land, watching its value rise.

In the Netherlands, local authorities will not pay more than €15,000 for a site and in the US, the cost of a site is never more than 20% of the house value, Mr Casey told delegates gathered for the annual ISME conference in Kilkenny.

"Land has not been as accommodating or flexible as materials or even labour for a number of reasons. Looking at Fingal, for example, 50,000 sites have been zoned but only 4,000 have been developed. About 25 individuals or organisations own over half of this development land.

"Prices have not come down because of the four pillars of the Fingal Landed Club capability (technical and financial); co-operation and not competition among developers; luck, in the form of strong demand and falling interest rates and finally, a benign neglect by legislators," he said.

Corruption in our planning system in the past grew because nothing has been done to bridge the gap between developed and undeveloped land, he added.

Two changes should be made to the planning system, Mr Casey said.

The right to develop land should be sold to the highest bidder, who owners would have to work with to develop the land, and a licence system for development that would see permission to develop land lapse within a year if left unused by developers should be introduced.