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On 7th December, the SCSI published their report into ‘The Real Cost of New Housing Delivery 2023’, which analysed the cost of delivering a typical 3-bedroom house across 80 sites nationwide. The report follows on from their 2020 analysis and saw an average increase in the cost of new housing delivery within the Greater Dublin area (GDA) of 24% compared to mid-2020. This includes an increase in ‘hard costs’ (defined in the report as bricks and mortar) of 27% and an increase in ‘soft costs’ (defined in the report as land, levies, finance, VAT and margins) of 21%. This represents a concerning trend in the increased cost of housing delivery, which the IHBA and its members have been monitoring for some time. In financial terms, the 24% increase represented a €90,126 difference in delivery costs between 2020 to 2023 in the GDA. The report found that most regions in the country are challenged in terms of financial viability when reviewing overall delivery costs against average national values. This high cost is only being passed on to the end user; the homeowner.
The SCSI have outlined various recommendations to overcome these challenges, which are summarised below.
- An extension of the development levy implemented this year by Government. The SCSI found that this resulted in a reduction of €17,500 in the GDA.
- A review of the First Home Scheme price ceilings (which should be adjusted in line with construction inflation).
- Appropriate resourcing of local authorities, utilities and An Bord Pleanála.
- Engaging early with utility providers (Uisce Éireann) to avoid delays.
- Housing For All targets to be updated with accurate (Census) data.
- MMC focus.
- The implementation of the proposed new Compact Settlement Guidelines to aid viability challenges.
- Financial viability to be required within the planning process, especially where this relates to planning conditions imposed as part of grants.
- Improved design flexibility to enable Local Authorities to approve building alterations that use more cost-effective materials.
- Further stakeholder engagement on the proposed Land Value Sharing legislation to reduce negative impacts on supply.
- The implementation of E-Conveyancing.
- Dedicated staff training for public sector housing.
- The implementation of a Land Price Register.
- Counter Cyclical Investment via the Infrastructure, Climate and Nature Fund which should be used for the purpose of delivering affordable housing.
- Governmental development to adopt International Measurement Standards.
The IHBA welcomes the SCSI’s report which provides an objective, accurate and up to date review of the real cost of housing delivery currently. The report highlights concerns which have been raised by IHBA members for some time and demonstrates why schemes like the development contribution levy and Uisce Éireann rebate are necessary to aid the delivery of new homes. We broadly support the recommendations outlined within the report and look forward to hearing the Government’s proposals to address these items.
A summary of the findings and full report can be found here: https://scsi.ie/the-scsi-publishes-the-real-cost-of-new-housing-delivery-2023/