What Are the Costs of Building a House in Ireland?
December 1, 2018 (No Comments) by Alannah Kenny

The housing crisis is such a topical issue right now with people marching to the Dáil only recently over extortionate rent prices, students having nowhere to go and whole families, including young children, being evicted and forced onto the streets like the middle ages. With the government seemingly holding back for now on providing more capital for the development of properties, we at The Sharpe decided to do a bit of digging into what it costs to build a house in Ireland and for individuals and couples fortunate enough to be looking into it for themselves, the implications that may affect them also.

The Housing Crisis

Since the Celtic Tiger gave its final roar, Ireland has been on the brink of a housing crisis for a long time. The deterioration of the economy due to the recession was when the situation notably escalated and now in 2018, we are in over our heads with the amount of homeless men, women and children on our streets due to a dysfunctional housing system. According to Focus Ireland, there was a staggering total of 9,527 people recorded as homeless across Ireland during the week of August 20th – 26th in 2018 – adults and children alike included. They suggest some key reasons for these figures, such as the fact that our public housing system is unable to accommodate the demands of a growing population, people being made redundant and therefore no longer being able to afford their rent/mortgage and landlords in the private sector who have raising rent prices to name but a few of the issues. For more up to date details on the homeless crisis statistics in Ireland, visit the Focus Ireland website here

The Independent online also reinforces the fact that supply in social housing is struggling bigtime to meet up with the demand of a growing population. They also explain that new houses are not being built to meet this demand, particularly apartments which are in dire need. With no land tax and an overreliance on the market to solve the social housing crisis, developers simply do not have the capital needed to build housing and the government need to step up to the plate. For more on this you can find it here.

How Much Would It Cost to Build a House?

Since according to the Irish Independent’s article lack of capital is a significant barrier to building more houses, let’s break down some of these costs in a more in-depth analysis. Soft costs in the construction industry are those which are associated with “nontangible items” according to The Balance Small Business article by Juan Rodriguez as seen here. An example of some of some of these soft costs includes the architecture and design, land, financing, levies and professional fees. The remaining construction is the hard costs such as paying for the building, site work, landscaping, etc.

The Society of Chartered Surveyors Ireland (SCSI) published a report for 2018 entitled “The Real Cost of New House Delivery” in which it breaks down the cost of building a three-bedroom semi-detached house in the Greater Dublin area. The hard costs of the physical construction work out as €150,251 whereas the soft costs as described (fees, land, sales & marketing costs, etcetera) would cost €180,242 so altogether the cost of building the house would be €330,493. You can find the full report here 

A cost calculator can also be found here on the homearchitect.ie website for anyone wishing to explore how certain factors can influence the price of the house.

Income Requirements to Build Your Own House

The harsh society we live in unfortunately requires individuals and couples to meet certain standards in order to build their own house. Firstly if you’re simply wanting to buy a house, according to Fiona Reddan reporting at the Irish Times, you can buy a house in Longford on a minimum wage but if you want to stay in the capital, especially in a premium area like Blackrock, you would need to be earning as much as €166K according to 2018 figures.

If you want to build your own home however, the ESB provides a good report on how to go about it and they recommend working out how to fund your build using one of their online calculators to check out mortgage availability and repayments. If you’re a first-time buyer you are entitled to up to 90% of the loan value and 80% if you are a second time buyer. According to the ESB you can borrow 3.5 times your income so this is important to factor to consider pro rata with the cost of the build because as mentioned, you could be looking at over €300,000. See here

Big Pitfalls & Mistakes to Avoid

Expect the unexpected is a good motto to go by when building your own home! For many first-timers, the process toward the final product might not run as smoothly as what they pictured in the beginning. Therefore, being aware of some of the most common errors that can occur when building your dream home could at the very least minimise your spending in the long run and your regrets. Sandra O’Connell from the Irish Times details some real-life examples here. One disadvantage that O’Connell outlines is the fact that many people follow the crowd by choosing mass-produced building materials which could cost an arm and a leg when they could get the same result from alternative, cheaper materials but are too afraid to divert from the familiar. Another tip is to plan effectively in advance and accumulate your fittings before the actual construction. It will force you to stay on track with your budget because the biggest panic when building is running out of money before completion. You should also plan the location well and what rooms you want the sun shining through. Also make sure you are aware of the possibility of neighbourhood pipes getting in the way of installing a fancy geothermal heating system as one unfortunate lady discovered. It is also important to speak up while the builders are still there if you want something added or changed. If you’re not 100% satisfied, don’t wait until later down the line to make adjustments because it will cost so much more!

Recommendations by the SCSI on Reducing Costs

The Society of Chartered Surveyors Ireland has stated that for the 2019 Budget there should be “sufficient funding” to make a major improvement in the housing crisis but that the government will need to overcome some barriers first like addressing skills and procurement shortages. In the meantime, the SCSI also published a list of key recommendations for the attention of government officials to help reduce costs for building. Some of their suggestions include establishing a reliable measure of funding by earmarking funding for data mining, collection and analysis. They also advise on reducing the tax-take from the costs of constructing new affordable housing, promoting new State-supporting financing solutions and establishing and funding a Commercial Price Register to name but a few suggestions. All details can be found here

Costs of Building Compared to Other EU Countries

According to a study conducted in March 2018 by housing.ie, Ireland, the UK and France  mostly equal when it comes to construction costs. Germany is slightly below Ireland however at 96% to Ireland’s 100%, but Switzerland is the highest of all the countries in the report when it comes to their costs of construction at 132%. This was measured using capital construction cost including VAT and design/management fees. Another interesting fact is that construction labour costs in Ireland are some of the lowest, in fact they match Germany’s rate of pay at €27.10 per hour. The UK charges the equivalent of €27.90 per hour of construction work and France charges €31.40 per hour. So overall and quite surprisingly, Ireland is somewhere in the middle when it comes to the costs of construction compared to other EU countries. See here for more info

Overall the costs of building a house in Ireland are not cheap but it is possible for the government to step up to the plate and delegate more funding to help the crisis for standard affordable housing. For those curious about building their own house, again it is not a cheap process and location matters greatly. However, if it’s planned well and if you avoid making common mistakes, the process should run smoothly. Yet for those who still need a standard roof over their heads, the 2019 Budget will hopefully prevail in finally dedicating much needed capital to development so that progress can finally be made in the system.

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What Are the Costs of Building a House in Ireland?
December 1, 2018 (No Comments) by Alannah Kenny

The housing crisis is such a topical issue right now with people marching to the Dáil only recently over extortionate rent prices, students having nowhere to go and whole families, including young children, being evicted and forced onto the streets like the middle ages. With the government seemingly holding back for now on providing more capital for the development of properties, we at The Sharpe decided to do a bit of digging into what it costs to build a house in Ireland and for individuals and couples fortunate enough to be looking into it for themselves, the implications that may affect them also.

The Housing Crisis

Since the Celtic Tiger gave its final roar, Ireland has been on the brink of a housing crisis for a long time. The deterioration of the economy due to the recession was when the situation notably escalated and now in 2018, we are in over our heads with the amount of homeless men, women and children on our streets due to a dysfunctional housing system. According to Focus Ireland, there was a staggering total of 9,527 people recorded as homeless across Ireland during the week of August 20th – 26th in 2018 – adults and children alike included. They suggest some key reasons for these figures, such as the fact that our public housing system is unable to accommodate the demands of a growing population, people being made redundant and therefore no longer being able to afford their rent/mortgage and landlords in the private sector who have raising rent prices to name but a few of the issues. For more up to date details on the homeless crisis statistics in Ireland, visit the Focus Ireland website here

The Independent online also reinforces the fact that supply in social housing is struggling bigtime to meet up with the demand of a growing population. They also explain that new houses are not being built to meet this demand, particularly apartments which are in dire need. With no land tax and an overreliance on the market to solve the social housing crisis, developers simply do not have the capital needed to build housing and the government need to step up to the plate. For more on this you can find it here.

How Much Would It Cost to Build a House?

Since according to the Irish Independent’s article lack of capital is a significant barrier to building more houses, let’s break down some of these costs in a more in-depth analysis. Soft costs in the construction industry are those which are associated with “nontangible items” according to The Balance Small Business article by Juan Rodriguez as seen here. An example of some of some of these soft costs includes the architecture and design, land, financing, levies and professional fees. The remaining construction is the hard costs such as paying for the building, site work, landscaping, etc.

The Society of Chartered Surveyors Ireland (SCSI) published a report for 2018 entitled “The Real Cost of New House Delivery” in which it breaks down the cost of building a three-bedroom semi-detached house in the Greater Dublin area. The hard costs of the physical construction work out as €150,251 whereas the soft costs as described (fees, land, sales & marketing costs, etcetera) would cost €180,242 so altogether the cost of building the house would be €330,493. You can find the full report here 

A cost calculator can also be found here on the homearchitect.ie website for anyone wishing to explore how certain factors can influence the price of the house.

Income Requirements to Build Your Own House

The harsh society we live in unfortunately requires individuals and couples to meet certain standards in order to build their own house. Firstly if you’re simply wanting to buy a house, according to Fiona Reddan reporting at the Irish Times, you can buy a house in Longford on a minimum wage but if you want to stay in the capital, especially in a premium area like Blackrock, you would need to be earning as much as €166K according to 2018 figures.

If you want to build your own home however, the ESB provides a good report on how to go about it and they recommend working out how to fund your build using one of their online calculators to check out mortgage availability and repayments. If you’re a first-time buyer you are entitled to up to 90% of the loan value and 80% if you are a second time buyer. According to the ESB you can borrow 3.5 times your income so this is important to factor to consider pro rata with the cost of the build because as mentioned, you could be looking at over €300,000. See here

Big Pitfalls & Mistakes to Avoid

Expect the unexpected is a good motto to go by when building your own home! For many first-timers, the process toward the final product might not run as smoothly as what they pictured in the beginning. Therefore, being aware of some of the most common errors that can occur when building your dream home could at the very least minimise your spending in the long run and your regrets. Sandra O’Connell from the Irish Times details some real-life examples here. One disadvantage that O’Connell outlines is the fact that many people follow the crowd by choosing mass-produced building materials which could cost an arm and a leg when they could get the same result from alternative, cheaper materials but are too afraid to divert from the familiar. Another tip is to plan effectively in advance and accumulate your fittings before the actual construction. It will force you to stay on track with your budget because the biggest panic when building is running out of money before completion. You should also plan the location well and what rooms you want the sun shining through. Also make sure you are aware of the possibility of neighbourhood pipes getting in the way of installing a fancy geothermal heating system as one unfortunate lady discovered. It is also important to speak up while the builders are still there if you want something added or changed. If you’re not 100% satisfied, don’t wait until later down the line to make adjustments because it will cost so much more!

Recommendations by the SCSI on Reducing Costs

The Society of Chartered Surveyors Ireland has stated that for the 2019 Budget there should be “sufficient funding” to make a major improvement in the housing crisis but that the government will need to overcome some barriers first like addressing skills and procurement shortages. In the meantime, the SCSI also published a list of key recommendations for the attention of government officials to help reduce costs for building. Some of their suggestions include establishing a reliable measure of funding by earmarking funding for data mining, collection and analysis. They also advise on reducing the tax-take from the costs of constructing new affordable housing, promoting new State-supporting financing solutions and establishing and funding a Commercial Price Register to name but a few suggestions. All details can be found here

Costs of Building Compared to Other EU Countries

According to a study conducted in March 2018 by housing.ie, Ireland, the UK and France  mostly equal when it comes to construction costs. Germany is slightly below Ireland however at 96% to Ireland’s 100%, but Switzerland is the highest of all the countries in the report when it comes to their costs of construction at 132%. This was measured using capital construction cost including VAT and design/management fees. Another interesting fact is that construction labour costs in Ireland are some of the lowest, in fact they match Germany’s rate of pay at €27.10 per hour. The UK charges the equivalent of €27.90 per hour of construction work and France charges €31.40 per hour. So overall and quite surprisingly, Ireland is somewhere in the middle when it comes to the costs of construction compared to other EU countries. See here for more info

Overall the costs of building a house in Ireland are not cheap but it is possible for the government to step up to the plate and delegate more funding to help the crisis for standard affordable housing. For those curious about building their own house, again it is not a cheap process and location matters greatly. However, if it’s planned well and if you avoid making common mistakes, the process should run smoothly. Yet for those who still need a standard roof over their heads, the 2019 Budget will hopefully prevail in finally dedicating much needed capital to development so that progress can finally be made in the system.



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