High construction costs have resulted in modern housing becoming unaffordable for many including those earning decent salaries. Numerous factors have caused housing to become an upmarket commodity, creating a significant crisis in the global economy.
A recent study by the Housing Department of Dublin reveals the alarming costs of developing a two-bedroom apartment in Dublin – €549,790 in suburban regions, and €549,790 in urban areas. These figures corroborate industry claims that the exorbitant developmental costs make it impossible to create affordable housing.
Cairn Homes CEO, Michael Stanley, recently highlighted the global issue where housing costs are no longer equivalent to four to five times the average industrial wage. Similarly, Hines Ireland’s Brian Moran pointed out that it’s not the market escalation but production costs including regulatory and tax burdens that are driving the prices.
He contrasted the situation, citing how Northern Ireland has chosen to compromise on living space and construction quality while also eliminating VAT. As a result, a property valued at €496,000 in Dublin costs only €300,000 in Belfast.
Moran expressed during the Dublin Economic Workshop that prioritising affordability over space and build quality could be a viable route for other countries, including Ireland. He stops short of suggesting a reduction in standards but instead urges reconsideration of the costs associated with high space and quality standards.
Unfortunately, instead of addressing the cost of production, the government has turned to support schemes to help prospective homeowners, a move that keeps the selling prices increasingly high.