Spin from CIF

From Breakingnews.ie, 8th Jan 2014;

Tom Parlon of the Construction Industry Federation (CIF) claims

[

](House prices 'need to increase', says CIF head)

CIF are claiming that it’s not worth their members time building and selling houses at the current market prices. Odd when you consider that they were happily building and selling, even ramping up supply, when property was at its current pricing levels in the early years of the last decade. Give the correction in the sector, the main inputs into house construction; labour, materials and land, will have all fallen massively in price, therefore, IMHO, there can be absolutely no justification to the claims.

Blue Horseshoe

There are some good posts by who_shot_the_tiger from a couple of years back on this topic.

Like in this thread…

viewtopic.php?f=4&t=36186

I reckon that based on current lending criteria, building regs and govt gouging a lot of people would not be able to fund a modest new build semi even if the land was cheap.

Actually building materials are up significantly.
Not only that but building regulations and insulation requirements add significantly to price- maybe extra 15% compared to 10 years ago. Then there are the extra health and safety requirements- and soon the requirement for engineer architect supervision.

All of this will just mean that in future, new houses will be smaller & simpler in style than those built in the past.
Then if you add in the fact that average wage inflation is very low and mortgage requirements are getting tighter, home ownership for the average person is becoming a more and more unrealistic proposition.

You mean we are returning to long term norms where those households with earning in the bottom quartile never own their own property.

If only the government hadn’t abdicated their responsibility to provide council housing to the private sector.

Having spoken over the Christmas to an Irish building contractor who having previously worked in Ireland has been running his own business on the Continent for the last number of years (he left pre-market correction … something to do with a girl from where he now lives), the new building regs are European standards that have been, or similar ones have been, in force in Continental States for a number of years already, so the materials are readily available and manufacturing processes are well established thus, according to said builder shouldn’t significantly add to the overall cost of construction, but will add to the long term value and efficiency of the property (unless of course local builders slap on a “healthy margin”).

In a similar vein, a conversation with a former “subbie” who’s still operating in the country and who previously worked on larger developments yelled this gem “I made most of me money outta things I didn’t do” … with regard to charging for work quoted by not carried out as there was no one around to supervise and make sure every task was completed … as a result, if such a practice was wide spread, then the arrival of supervision may not significantly increase the cost (and may result in the job being done right).

Blue Horseshoe

They are European regs n relation to insulation. How that is implemented in different countries ( with different climates) is another issue.
Ireland was at least as early if not earlier in implementing the regulations than the UK and France. I am not familiar with new build in other jurisdictions- but I doubt others were implementing European directives any appreciable extent faster.

Not only that, but building techniques between countries differ. Even between the UK and Ireland-where we’ve prey much copied our regulations from. Thus onthe certain types of product can readily transfer between countries.

If an Irish contractor can add a “healthy margin” in the past 6 years or going forward, I salute him.

I agree that supervision was lacking during the bubble. It remains to be seen to what extent this will be remedied by the pending change. Nevertheless it represents an additional cost for a normal punter.

If there are techniques uniquely in use in Ireland that raise our costs, we need to dump them. There’s no reason (for example) that buildings built to German spec shouldn’t be perfectly serviceable in the Irish climate.

The anecdotal data point I can add is that without fail Germans who live in Ireland complain that the houses are cold, draughty, and difficult to heat.

Plenty on house-building costs in this thread (mainly on one-offs, but a post from temene on developments too)
viewtopic.php?f=10&t=61632

I suspect they are living in old properties.
I’m talking about residential buildings actually built (as opposed to Priory Hall type) to reasonably recent building regulations (say last 10 years).
Lack of compliance with the actual rules is/was obviously a particular Irish problem.

Our techniques are mostly shared with parts of the UK with similar weather conditions. You can start using continental building techniques if you want - it will however cost significantly more than building using local techniques - at least partly because the system (and local skills) are built around the local methods of building.

Where German builds will tend to fall down is differences in electrical/mechanical requirements, fire escape and disabled access. As far as I can see requirements in particular for fire escape and disabled access are particularly high in Ireland. There is also the issue of whether building products will actually survive in the Irish climate. You can rely on an Irish Agrement certificate - or a British one - if you want to rely on a German certificate, that’s great too - but someone whose insurance is on the line may be less happy to do so.

It is possible to get German timber frame houses in Ireland - these are a great product - but tend to be expensive.

If it’s shared with the UK, that’s OK: there’s enough scale there to drive the efficiency in the supply chain. If things are Irish specific, then I’m very suspicious. Barriers to entry, etc.,

With fire escape, is there really any benefit to the Irish systems? Nothing empirical/quantitative I’m pretty sure.

Is the Irish climate so special? Is it so different to Scotland or Denmark and so much more demanding, or the German northern coasts?

Not different to Scotland - same products and regulations (more or less) work there as here.
The biggest difference I can think of is that the software for the BER is slightly different than that in the UK (for the EPC). How the design requirements are achieved however is more or less the same.
No idea on northern Germany or Denmark.

You’ll have to take that up with the British - we copy them.

I remember a builder over at boards.ie claiming that the absolute minimum a 3 bed semi complying with the regs could be built for was €150k so he’s saying that even if you wanted to live in Longford, that’s what you need to spend. My question (which never got answered) was: how do other countries manage to do it for cheaper then?

Any ideas where one might find building costs for other European countries?
Any help or links appreciated.

Was it not reported in primetime and elsewhere that during the boom something in excess of 50% of the cost of building a property in Ireland was taken in taxes of one form or another from PAYE on employees to VAT, stamp duty etc.?

Here are the 2013 Society of Chartered Surveyors Ireland figures for rebuild costs. From the document

Like previous years, fixtures such as bathrooms, kitchens and wardrobes are included … so basically price to have a house ready for you to move your furnishing and family into. Keep in mind, the price does not include the site, but does include demolition of the “destroyed” property, site clearance and preparation works for the construction of the one off property. So for a developer working on a new estate, the “unit cost” would be lower, but they would have to allocate the price of the land and any local authority fees into the final costs.

scsi.ie/house_rebuild_cost_guide_2013

Blue Horseshoe

I read that 45% of total cost was delivered, on average, in assorted taxes and levies to central and local government per new dwelling in Tiger Times. Like booze, fags and petrol really!

So how is it that you can get monstrously-huge houses in nice areas in the USA for a fraction of the Irish cost? Did you ever see any of those HGTV shows?

It is not as if 3rd-world wages are being paid there. And I do not imagine the building codes are more lax there.

Here’s a calculator for Germany deutscherbau.de/baukostenrechner5.php
I’ve used 120m2, no basement, Standard Construction, 2 floors, built in Bavaria: 156000 euro.