According to a leading construction consulting firm, the cost of building a mid-range apartment has increased to €27,000 during the Covid-19 emergency.
t found that the hard cost to build a two-story apartment, standard spec, in the suburbs is currently €219,000.
The main reason for the increase was the sharp increase in raw material prices that occurred during pandemic.
Consultants Mitchell McDermott sees wood prices up 86pc, windows up 61pc, steel up 52pc and sanitary ware up 20pc.
It figures €219,000 in construction costs excluding indirect costs, parking, construction site and VAT.
If those costs are included, the total cost of delivering the apartment is in the region of €440,000.
Paul Mitchell, one of the report’s authors, said that if the apartment were to be viable, the sale price would have to exceed €440,000.
He predicts that construction costs will increase by 6pc to 7pc this year.
“Emissions restrictions in China have led to a reduction in steel supplies, while post-Covid construction programs in the US and Europe are boosting demand for timber,” he said.
“One would expect a lot of cost spikes to correct themselves in the short to medium term once the supply chain returns to normal.
“That said, the situation in Ukraine will cause additional supply chain problems for certain materials.”
A separate report from the Bank of Ireland Payments Federation (BPFI) shows a decline in the fourth quarter of last year, due to the Covid shutdown.
The banking authority said capacity in the construction sector remains an issue, with labor shortage being one of the main issues.
Banks say 30,700 homes started last year, up 42 percent on 2020.
The banking authority said more than 50,000 new residential apartments are expected to be built between now and the end of 2023.
Mitchell McDermott said there was a 30pc increase in the number of judicial reviews conducted on Strategic Housing Developments (SHDs) last year.
This means that despite planning permission for 26,151 residential units under the SHD process, more than half of them were unable to proceed because of judicial reviews.
“On the one hand, while nearly everyone agrees that we need more supply, on the other hand supply is being squeezed due to the growing prevalence of judicial reviews,” Mr. Mitchell said.
He says there is an urgent need to reform the planning process.
He also criticized proposals from some Dublin local authorities to either limit Build-to-Rent (BTR) projects or limit the proportion of rentable apartments in developments. new. These proposals, if passed, would severely damage supply, he said.
According to the report, 20,000 housing units, including 5,000 apartments, are to be completed by 2021.
Mr. Mitchell said the fact 20,000 units were completed – even if locations close for 30pc of the business year – is a positive.
This implies that the number could be closer to 30,000 units if it weren’t for the lockdown and shows what could happen. Consultants believe 25,000 to 30,000 units will be produced this year, with an expected total of 35,000 units, an annual figure that most commentators believe we need to meet demand. .
https://www.independent.ie/business/personal-finance/apartment-building-costs-have-risen-by-27000-41426075.html The cost of building apartments has increased by €27,000