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Analyses on the Cost of Delivering Housing in Ireland

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Analyses on the Cost of Delivering Housing in Ireland

Analyses on the Cost of Delivering Housing in Ireland
April 26
14:59 2018

The Government has published three reports on the cost of residential delivery in Ireland –  Review of Delivery Costs and Viability for Affordable Residential Developments; Cost analysis of the updated Sustainable Urban Housing: Design Standards for New Apartments, Guidelines for Planning Authorities; and Comparison of Residential Construction Costs in Ireland to other European Countries.

Commenting on the reports, Eoghan Murphy, TD, Minister for Housing, Planning and Local Government, said: “Each of these reports is important in terms of analysing key elements of our housing sector as well as providing robust responses. Viability in affordable home building is essential as the sector recovers and the Government continues to implement solutions in this area. Indeed, what we see in these reports, now published, is not unexpected and my Department has been working to address issues raised for some time.

“We know from the ‘Delivery Costs’ report and from evidence in the sector that building affordable apartments has been a challenge from a cost point of you. And yet if we are to resolve the current housing shortage, as well as to plan smartly for our future under Project Ireland 2040, we need to build thousands more affordable apartments in our urban centres.

“That’s what the new ‘Design Standards’ for apartments are designed to achieve. We can provide more choice for individuals and families, achieve better standards and use building design to improve sustainable living. And we can do this while also reducing construction costs by up to 15%, and these reports and the new guidelines show how we can deliver that.

Eoghan Murphy, TD, Minister for Housing, Planning and Local Government.

“The Housing Agency ‘Comparison’ review has also found that we have comparable construction costs when measured against countries like the UK, Germany and France. It’s good to know that we are not outliers in this area.

“Rebuilding Ireland is an ambitious programme containing a number of initiatives to restore and remake our housing sector, as well as to find sustainable solutions for those in emergency accommodation or sleeping rough. This will continue to be a priority for Government as Rebuilding Ireland continues to make progress.”

In line with Rebuilding Ireland, the Review of Delivery Costs and Viability for Affordable Residential Developments was carried out by an expert working group, chaired by the Department of Housing, Planning and Local Government and included construction sector representatives. The review includes an analysis of the main input delivery costs of land; construction costs; professional fees; development levies/contributions; finance cost and development margins; and VAT. It also includes an assessment of the viability for affordable housing developments and apartments and makes recommendations on actions that could be considered to help minimise and reduce the costs for future residential developments.

In the context of the need for an estimated 45,000 new homes in Ireland’s five cities out to 2020 and a minimum of 550,000 new homes across Ireland out to 2040, as identified in the National Planning Framework, with 50% of these to be provided in the five cities, it is critical that apartment living becomes an affordable, attractive and desirable housing option for a range of household types and tenures.

The Department has already reviewed the design standards for new apartments in consultation with a range of stakeholders and the updated guidelines were published last month.

Key aspects of the previous design standards for apartments have been amended and new areas addressed in order to:

  • enable a mix of apartment types that better reflects contemporary household formation and housing demand patterns and trends, particularly in urban areas;
  • make better provision for building refurbishment, the bringing in to use of vacant floors/buildings, and small-scale urban infill schemes;
  • address the emerging “build to rent” and “shared accommodation” sectors; and
  • remove requirements for car-parking in certain circumstances, where there are more sustainable transport options and to help reduce costs.

The Cost analysis of the updated Sustainable Urban Housing: Design Standards for New Apartments, Guidelines for Planning Authorities now follows this work. The costs of the changes have been analysed by a technical working group and the changes to the guidelines can and will reduce apartment construction costs by up to 15%, depending on the nature of the apartment development.

Finally, in the interest of bench marking Irish construction costs, the Government had also requested the Housing Agency to examine residential construction costs in Ireland compared to a range of comparable European countries.

The Housing Agency review, Comparison of Residential Construction Costs in Ireland to other European Countries, has found that Ireland has comparable construction costs for residential buildings with the UK, Germany and France. Ireland is not out of step with countries that have of comparable climatic conditions (e.g. heating and ventilation requirements) and similar economic characteristics and construction labour costs.

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