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The total development costs of building medium-rise apartments in Dublin have fallen by between two per cent and nine per cent over the past three years, a report has found.<\/p>\nThe total development costs of building medium-rise apartments in Dublin have fallen by between two per cent and nine per cent over the past three years, a report has found.<\/p>\n
It found that the viability of the type of apartment has improved significantly over the same period.<\/p>\n
However, the report also found that affordability remains a critical issue and that a first-time buying couple would require a deposit of \u20ac38,000, and a joint income of \u20ac98,000 to purchase the lowest price apartment type.<\/p>\n
The Real Costs of New Apartment Delivery 2020 was published by the Society of Chartered Surveyors Ireland (SCSI).<\/p>\n
It found that the all-in cost of delivering medium-rise two-bedroom apartments in the Greater Dublin Area ranged from \u20ac411,000 for a low-spec unit in the suburbs, to \u20ac619,000 for a high-spec one in the city.<\/p>\n
The costs of delivering a low-rise suburban apartment ranges from \u20ac359,000 for a low-spec unit \u2013 an increase of eight per cent since the SCSI\u2019s last apartment report in 2017 \u2013 to \u20ac413,000 for a high-spec one, up seven per cent.<\/p>\n
All these figures are cost prices and sales prices would need to exceed these for developments to be viable.<\/p>\n
The latest report is based on data covering almost 10,000 apartments in four different categories in 49 schemes.<\/p>\n
Last July, the SCSI\u2019s \u201cReal Cost of New Housing Delivery\u201d found the cost of delivering a three-bed semi in the Dublin area was \u20ac371,000.<\/p>\n
The latest report also found that the cost of building a medium-rise apartment \u2013 known as hard costs \u2013 made up 47 per cent, or less than half of the overall costs. This is up from 43 per cent in 2017.<\/p>\n
Soft costs such as VAT, levies, margins and fees make up 42 per cent of the total costs of a medium-rise apartment, while site costs accounted for 11 per cent of the total, a fall of five per cent on 2017.<\/p>\n
Paul Mitchell, chair of the SCSI working group that authored the report, said the reduction in costs and improved viability were positive signs.<\/p>\n
\u201cWe can really see the impact of the Department of Housing Guidelines from 2018 on apartments coming through in these figures, especially the reduction in car parking requirements,\u201d he said.<\/p>\n
\u201cThose reductions, together with different site costs, bigger schemes and more efficient design have all helped to offset tender price inflation and regulatory cost increases.<\/p>\n
\u201cThe guidelines have also had a positive impact on supply \u2013 reflected in a substantial increase in the number of planning applications and approvals for apartments \u2013 and helped overall viability.<\/p>\n
\u201cWhen we published our first apartment report in 2017 only the low-rise, low-spec unit in the suburbs was viable, now we have two apartment types viable, with another two very close \u2013 including medium-rise in the suburbs.\u201d<\/p>\n