Buyers need to earn at least €128,000 to afford a new-build home in Dublin

The cost of building a typical family home has shot up in the last three years.

It now costs so much to build a standard three-bed semi-detached house in the Dublin region that buyers need a combined salary of at least €128,000 to afford it.

Surveyors have calculated that it costs €461,000 to deliver a three-bed semi in Dublin. This is up by €90,000 in the last three years, according to new research from the Society of Chartered Surveyors Ireland (SCSI).

It means the cost of construction has soared by 24pc.

The research shows construction inflation is biting hard for builders, due to higher material costs, rising energy prices and fuel costs.

The report, “The Real Costs of New Housing Delivery”, puts the cost of building a similar house nationally at €397,000.

When Dublin is excluded, it costs €386,000 to build a three-bed semi across the State.

Builders are also being hit with increasing land costs, higher finance costs due to interest rate increases and an uplift in professional fees.

It is over €100,000 cheaper to build a three-bed semi in the north-west than it is in Dublin. Surveyors have calculated that it costs €354,000 to build such a home in Cavan, Donegal, Leitrim, Monaghan and Sligo.

The SCSI report found prospective first-time buyers need an average combined salary of €95,000 to get a mortgage for a house nationally, given costs of building at the moment – and this includes support from the State’s Help-to-Buy scheme.

Analysis shows the midlands and the north-west are the most affordable regions for buying a new home, using averaged market value data. The least affordable regions for the average first-time buyer are the greater Dublin area, the Galway region and the Cork region.

The combined minimum salary level required to buy a new three-bed semi-detached house is an average of €128,000 in the Dublin region and €115,000 in Galway.

In the north-west, buyers need to be pulling in €85,000, while it is €87,000 in the midlands.

Chartered quantity surveyor Micheál Mahon, one of the report’s authors, said the impact of Covid-19 and the conflict in Ukraine have been the main contributors to the increase in ‘hard costs’ over the past two years. Hard costs include materials, house-building, site works and site development.

These ranged from just over €198,000 in the north-west to just over €228,000 in the greater Dublin region. ​

“The main hard cost drivers have been energy, fuel and shipping costs,” Mr Mahon said. “The cost of various building materials – particularly concrete, insulation, electrical and plumbing products, steel reinforcement and timber products – also increased dramatically.”

Nationally, hard costs are now 53pc of the total costs of overall delivery, while soft costs – including land, margin, levies, finance costs and Vat – make up the rest. In the greater Dublin area, soft costs are higher than hard costs.

The good news is that despite cost inflation, the SCSI surveys indicate prices are levelling off.

By Charlie Weston

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