I’ve long wondered why developers have been doing the “beal bocht” on not being able to make money at current market levels, so have been doing some digging. In the process I came across this little gem from the Irish Home Builders Association in mid 2012. It turns out it was also posted in this parish previously, but linked to from the CIF site on that occasion (for some reason it’s been removed from the CIF site since )
In short, for a development of 100 3 bed semi-d’s the fully loaded cost (including such items as advertising and show house) is less than €200,000 per unit (ex-land & ex-VAT). According to the CSO, average hourly earnings in the construction sector have fallen between 2012 and 2014 by 10% even as the numbers employed in the sector has increased by 5%, which would suggest the cost of building each unit would have further reduced.
So, excluding the land prices, the per unit build cost for the “average family home” to current energy efficiency standards is no more than circa €200,000 (excluding crazy land purchase prices & VAT).
Blue Horseshoe
Edit: Part L (energy efficiency) costs were already included in the pricing.
Actually the basic costs are much less than 200k.
The rebuild costs are calculated for insurance purposes and amount to €1,778 sq m (€165 /sq foot )in dublin and much less elsewhere
€165 / sq ft seems a little high and ignores any economies of scale (assuming you are not building apartments)
However a developer also has to cover
Development levies
Legal costs (buy side and sell side)
Professional fees
Finance fees
Land
Profit
& 13.5% Vat on all the above
IMO build costs actual represent less than 50% of the price paid (thanks to government levies, regulations and taxes)
Generally, places where building land is plentiful not the same places where prices are going crazy. Adamstown today probably has much better facilities than a 1970’s estate in Dublin 16 did when it was built. The people clamoring for those very same 1970’s built houses in D16 today don’t want a new build in Adamstown. A site value tax would help to make more efficient use of land in the frothiest areas but there’d still be limited supply of new builds.
If you ever want to catch out a builder doing the beal bocht, ask him what it cost to build his own once-off MacMansion.
Sure, his own labour is free and his buddies will be giving him preferential rates but he still has to get the materials and the land. Price generally isn’t a million miles away from what he’ll be claiming is the break-even price on a 2.5 bed semi-D.
There is a lot of extra health and safety requirements on sites since the 80’s. Also a lot of extra paperwork/fees.
Our government is not really strong, so we are subject to this low level tyranny of redtape and corruption which results in appalling planning and development in general.
Protecting workers basic rights is not “low level tyranny”. Nor does extra H&S cost more, there are countless studies inside & outside Ireland that show that cost decreases, as safety increase, not least because Insurance firms, once they weed out the cowboys, who don’t give a shit about their employees, don’t need cover themselves with huge premiums.
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