Building in Dublin is more expensive than Paris as material and labour shortages have made the Irish capital Europe’s third-costliest city for construction, a new survey shows.
Construction costs in Dublin are running at €2,400 per square metre, ranking it number three in Europe, behind Geneva at €2,954 per square metre and London, where costs are €2,720 per square metre.
A study of world building prices by project managers Turner & Townsend shows construction is more expensive in Dublin than in European centres including Paris, where costs are €1,825 per square metre, or Berlin, where they are €1,970 per square metre.
The firm blames increases of as much as 40 per cent in the price of materials including timber, steel and copper piping for the rising cost of building in Dublin and other centres.
Suppliers to the Irish industry have been warning about global shortages of key materials, with consequent price rises, since early this year.
Bottlenecks in the Department of Agriculture are delaying the issue of tree-felling licences, which has led to a shortage of timber and reported price rises of more than 60 per cent for some products.
A Construction Industry Federation (CIF) spokesman warned that Irish builders were coping with a "perfect storm" of cost pressures, to which Covid-19, Brexit and local issues were all contributing.
“We’ve seen prices doubling on some materials, suppliers have pushed through a series of price increases and are rationing in some cases,” the spokesman said.
He added that wage claims allied to pent-up demand in house building, office construction and public-sector projects had pushed up labour costs.
The Turner & Townsend survey shows that average hourly rates paid in Dublin are almost €40, ranking it number four in the European Union, behind Munich, €52; Amsterdam, €46; and Paris, €44.
“We need the Government to help reduce the costs of construction by reducing delays involved in planning and procurement,” said the CIF spokesman.
Dublin's costs rank the city as the 12th most expensive place in the world to build. The survey places Japanese capital Tokyo, this year's Olympics' host, at number one with an average cost €3,395 per square metre.
Hong Kong, where the bill amounts to €3,304 per square metre, is in number two while San Francisco, home to many of the world's high-tech companies, is at number three with costs of €3,156 per square metre.
Turner & Townsend identifies Dublin as one of five centres around the world where the market risks overheating, with “warm” tendering conditions set to get “warmer”.
Mark Kelly, the multinational firm's managing director Ireland, said materials shortages were shifting the balance of power to suppliers from clients. "We can't escape the reality of soaring construction prices," he warned.
He added that builders needed to look at where they could cut costs and boost efficiency.
Data centres were the buildings most sought by clients, according to Turner & Townsend, making this the first year that this industry has topped the list of most buoyant sectors.