Only the top 20 per cent of earners can afford to rent an average apartment built in Ireland in 2025, while just the top 40 per cent of earners can afford to buy one, according to a new analysis of their building costs and impact on affordability.
The Society of Chartered Surveyors Ireland’s (SCSI) latest Real Costs of New Apartment Delivery report, the first in the series since 2021, shows buyers face a big affordability gap with sales prices for a two-bedroom apartment ranging from €480,000 in suburban medium-rise schemes to €650,000 in an urban development.
To afford these apartments, a first-time buyer couple would require a combined salary of between €108,000 to €146,000, based on a 4:1 loan-to-income ratio.
It means the Government’s Help to Buy and First Home schemes are unavailable for a large proportion of the 11,000 apartments included in the SCSI’s study, because their sale price is above the €500,000 price threshold.
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“Based on [Central Statistics Office] CSO figures, only the top 20 per cent of earners in Ireland can afford to rent an apartment, only the top 40 per cent can afford to buy an average apartment, while the cost rental scheme, which has defined parameters, is targeted at couples earning less than €59,000-€66,000 net,” it said.
It comes as a CSO report on Monday found that 14.8 per cent of the population were deprived of basic needs this year. Deprivation is defined as living in a household that cannot afford two or more of the 11 basic deprivation items considered to be the norm.
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These include adequate heating, being unable to afford a meal with meat, chicken, fish, or vegetarian equivalent or being unable to afford new clothes.
The CSO figures show that while around 30 per cent of people in Ireland live in rented or rent-free accommodation, they account for six in 10 (63.8 per cent) people living in enforced deprivation in 2025. This is an increase of 2.5 per cent on last year.
The SCSI report indicates the total development costs of delivering two-bed apartments in a medium-rise development in an urban area have risen by between 4 per cent and 6 per cent over the past five years.
Yet the increase has been steeper in the suburbs, where the cost of delivering a medium-rise apartment – typically the cheapest apartments to deliver – has risen 32 per cent, from €411,000 on average to €541,000.
Paul Mitchell, a chartered quantity surveyor and one of the report’s co-authors, said the disparity relates to a big shift in apartment design and delivery of the past five years.
“In the previous 2021 report, we didn’t have cost-rental apartments. Now, cost-rental makes up half of the apartments in this data set,” he said.
Mr Mitchell said that improvements in design and standardisation have also kept costs down.
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“We are seeing a shift away from suburban apartments to duplexes to achieve required density, while the focus with apartment construction is on building more efficient, larger schemes,” he said.
Mr Mitchell said that while the cost of what was once the cheapest apartment to build has increased sharply, the cost of the more expensive apartments has eased considerably.
“Our analysis shows that while the difference between the cheapest and most expensive apartment in 2021 was 58 per cent, the difference or spread in our latest report is just 21 per cent,” he said.
“In practical terms, this means the variation in cost per square metre has narrowed across all apartment types to between €2,600 to €3,150 per sq m, where previously it was €1,850 to €2,850.”
Speaking to reporters on Monday, he said he and his co-authors were “pleasantly surprised” by the numbers, given the sharp spike in general price inflation within the Irish economy since 2021.
“It’s a kind of very positive news story, because if the rate [of delivery cost inflation] per square metre had followed inflation, no amount of measures would make these schemes viable today,” Mr Mitchell said.
Government interventions – including the reduction in the VAT rate on new apartments from 13.5 per cent to 9 per cent in Budget 2026 – have improved viability across several categories of apartment development.
The report recommends that the Coalition explore a “time-limited” package of incentives to increase foreign investment in the private rented sector to improve supply.
“We need supply, but we can’t build it on our own,” Mr Mitchell said. “The recent reform of the rent pressure zones will help but it will still take time for international investors to return.”
