COST OF HOUSEBUILDING MUST COME DOWN
COST OF HOUSEBUILDING – James Benson, Director of the Irish Homebuilder Association (IHBA), has stated that the association welcomes the ESRI’s acknowledgement that the cost of housebuilding must come down to enable increased supply. “Since 2013, we have highlighted the fact that nearly 45% of the cost of housebuilding isn’t related to construction but ‘soft costs’ such as taxes, levies, cost of finance and land costs.
“For apartment building, the ‘soft costs’ of construction are around 41% of the total cost of delivery. he construction costs represent on average 43% of the totality of cost of delivery. These figures are from the Society of Chartered Surveyors of Ireland’s regular analysis into construction costs. Reducing these levies, taxes and the cost of financing delays with utilities such as Irish Water will help bring down the cost of delivering housing. This week, the Central Bank reported that our economy required 34,000 housing unit output per annum or 90 new houses a day for 10 years. Irish homebuilders are struggling to deliver 21,000 units this year due to increasing costs; 45% of which have nothing to do with building.”
He added that unless some of these costs are reduced, development finance is more accessible and the delivery schedule of utilities are aligned with housebuilding, the industry will continue to struggle to increase output to 34,000 per annum.
