Eoin Burke-Kennedy presents a comparison between the recent, extensive cost breakdown for housing construction, as shown in the report by Mitchell McDermott for the Housing Department, and the pricing strategies Aer Lingus might have presented to justify its fare costs before Ryanair demonstrated that they could drastically reduce these prices. Burke-Kennedy, however, doesn’t question the key factor that pushes costs higher – an excessive dependency on apartments – arguing that this is what the under-supplied, low-density housing market in Ireland needs.
Most prospective first-time buyers do not share this perspective. Unless extreme cost-saving measures similar to Ryanair’s strategies or selective state subsidies are implemented to make apartments more affordable than semi-detached or terrace houses, this is unlikely to change. Mitchell McDermott estimates that the cost to produce apartments in Dublin ranges from €550,000 to €590,000, compared to €450,000 for semi-detached homes, even though the latter provides approximately 30% more floor space.
New apartments are significantly pricier than new traditional houses, a disparity that increases when prices are calculated on a square metre basis. Mitchell McDermott estimates prices per square metre at €4,100 for semi-detached homes, whereas for an apartment, the cost ranges from €6,040 to €6,500. Making an assumption that the costs for semi-detached house and a terrace house per square metre are roughly the same, a two-bedroom terrace house in Dublin with the same floor space as a two-bedroom apartment would cost around €370,000.
This price is still too high. However, as we are currently in a market favourable to sellers, overpricing is commonplace. Expanding the supply may take time to regulate prices, but a strategic increase focussed on producing more affordable housing could have a quicker impact. If the price ratios between different types of housing don’t drastically shift, this would likely mean that there needs to be a policy change towards encouraging the mass-production of cheaper, small terrace houses.
The mishandling of the Syrian refugee crisis by Ireland, followed by abandoning them in a Lebanese war zone, is an unfortunate tale. Equally stirring is the narrative of perseverance where an individual managed to secure nine H1s in the Leaving Cert by employing early morning study sessions, beginning as early as 4.30am.
When discussing housing, the adoption of efficient policies could result in a higher production unit output per government funding or construction resources available. Such policies could potentially keep a check on the prices of compact second-hand terrace homes, a popular choice amongst first-time homebuyers. Ideally, promoting expandable houses or at least ensuring ample storage facilities through mandated, unrestricted internal roofing could be a way forward, favouring purlins over traditional roof trusses.
Multiple comparative cost estimations, akin to those by Mitchell McDermott, have been conducted since 2016 mainly by the Society of Chartered Surveyors (SCSI). Most of these calculations revolve around semi-detached houses and apartments, reflecting the majority of new Dublin structures, with little to no focus on small, conventional terrace homes.
A thorough evaluation of not just the existing, but also potential production capabilities could have provided a more comprehensive range of options for the government. Terrace houses usually have a lower occupancy density than apartments but offer more space than semi-detached or individual homes. Moreover, traditional houses tend to use more environmentally friendly timber, which stores carbon and less carbon-ridden steel or concrete. However, weighing these ecological benefits against the additional €200,000 cost involved for an apartment of equivalent size compared to a terrace house is rarely discussed.
It may be challenging for industry specialists to break away from ingrained assumptions. Yet, this should not deter the media, or for that matter, anyone else from voicing independent thought. – Yours sincerely,
Dr Nicholas Mansergh, MIPI,
Cork.
Dear Editor,
The recent Total Development Cost Study report published by the Department of Housing, Local Government and Heritage appears to serve as substantiation that the construction costs for apartments in Ireland have skyrocketed, thereby rendering them out of reach for the average person. However, upon a basic examination of this report, it doesn’t necessarily have to be the case.
The report uses pricing models and samples that seem to inflate the costs of apartment building in comparison to houses. For instance, it equates the land cost for a three-bedroom semi in North County Dublin to the land cost for an apartment complex in central Dublin. It’s quite explicit that this will elevate the cost of the apartment if built on the same or a similar site to the house.
But, this is only part of the picture. The report suggests that finishing and fitting costs for a two-bedroom flat are 70% more expensive than those of a three-bedroom house. Why is that so?
Also, it seems to hint that the service and “preliminary” costs for apartment construction are nearly double that of a house. What’s the reason for the cost of a car parking slot being two-thirds higher in one sort of apartment complex than in another? Why are apartments charged with professional fees nearly thrice as high as for houses? Even sales and legal costs seem inflated by almost a third.
These questions lay unanswered by the report, implying that these are the numbers provided by the industry to the authors, and hence, there is no further explanation.
Sincerely,
MARK HAYDEN,
Sauvian,
France.