€578,000 to build a two-bed apartment in Dublin - report

Building apartments in Dublin is more expensive than constructing a three-bedroom semi-detached house, according to a report by the Society of Chartered Surveyors Ireland (SCSI).

The Real Costs of New Apartment Delivery found the cost of delivering a two-bedroom, low-rise apartment in suburban Dublin ranges from €293,000-€346,000 excluding VAT.

A medium rise apartment – ie in a block five to eight storeys high – in the suburbs costs €400,000-€418,000 to deliver. Building the same block in the city would cost from a low of €470,000 to €578,000 at the higher end.

A similar report by the SCSI, which is the professional body for construction and property professionals, has put the outlay for a three-bed semi-detached home in Dublin at €330,493. All figures include the margin a reasonable developer might expect to earn.

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The report on apartments, published Tuesday, found the actual cost of delivering them exceeded the sales prices a developer could expect in each category, with the exception of the suburban low rise at the lower end of the scale, where price of €298,000 compared to the delivery cost of €293,000.

Low rise

For a low-rise suburban apartment at the higher end of the scale, the gap from cost of delivery to sales price is €38,000. Elsewhere, a medium rise suburban apartment sells for €82,000-€95,000 less than the cost of delivery.

In urban areas, the report found the gap grows further, ranging from €133,000-€137,000 from the lower to the higher end of the medium rise spectrum.

The SCSI report also found the “hard costs” – the actual cost of construction – make up 43 per cent of the overall costs, while “soft costs” such as VAT, levies, profit margins and fees make up 41 per cent of the costs. Site purchase accounted for 16 per cent of the total.

‘Extraordinarily high’

Davy chief economist Conall Mac Coille said the figures seemed “extraordinarily high”.

“The idea that people are going to build apartments that are six and seven times the average first time buyer income just doesn’t seem viable,” he said. “The answer here is not relaxing mortgage lending. It’s to tackle the underlying issues.”

Paul Mitchell, chairman of the SCSI working group that authored the report, said the research indicated that the housing crisis cannot be alleviated by building upwards. "The most expensive apartments are the medium-rise ones in the city," he said.

“Our research shows the higher you go, the greater the costs. This is due to the fact that these buildings have a more complex structure and require a wider range of mechanical and electrical services, sophisticated facades, basement parking and much more.”