Home builds in Cork closing in on half a million
A major new report has revealed some staggering prices when it comes to the cost of building homes in Cork.
The Real Cost of New Housing Delivery 2023 report, published recently by Society of Chartered Surveyors Ireland (SCSI), found that the average cost of delivering a new three-bedroom semi-detached house in a multi-unit scheme in Cork is €433,000.
Currently, the national average cost for the delivery of a new three-bedroom semi-detached house ranges from a low of €354,000 in the northwest to a high of €461,000 in the Greater Dublin Area (GDA).
Chartered Quantity Surveyor Micheál Mahon, one of the report's authors, said the impact of Covid and the conflict in Ukraine have been the main contributors to the increase in “hard costs” over the past two years, which include house building costs, siteworks, and site development.
“The main hard cost drivers have been energy, fuel, and shipping costs,” he explained. “The cost of various building materials, particularly concrete, insulation, electrical, and plumbing products, steel reinforcement, and timber products, also increased dramatically.
“Nationally, hard costs now comprise 53% of the total costs of overall delivery, while soft costs (land, development levies, fees, vat, margin) make up the remaining 47%,” added Mr Mahon.
Using average market value data of new three-bedroom semi-detached properties across the various regions, the report assessed the financial viability of new home building in different parts of the country. Financial viability is determined by subtracting market value from overall delivery costs.
The research shows that financial viability, on average, is most challenged in areas of lower market values. The region where this challenge is greatest is in the midlands region, where the average viability gap is €52K, followed by the Cork region, €50K and then the northeast region, €45K. The two areas where the construction of a new 3 bed-semis is most viable on average is Galway and the Greater Dublin Area.
In the report, the SCSI also examined affordability from the perspective of a first-time buyer with an average combined salary of €95k taking out a mortgage with the support of the Help to Buy scheme.
The most unaffordable regions to the average first-time buyer are the GDA region, Galway region and the Cork region. The report shows that the combined minimum salary levels required to purchase a new 3 bed semi in Cork is €104k on average.
Despite the challenges, Mr Mahon said the SCSI’s analysis showed that Government supports aimed at addressing viability and affordability are making a noticeable impact.
Following the publication of the report, President of the SCSI, Enda McGuane, said that more needs to be done to support modern methods of construction, pause future increases to connection charges and levies, as well as ensure the planning process is fit for purpose to de-risk development and bring down cost, which potential homeowners ultimately pay.
The full report is available online at scsi.ie/realcost2023.