The average cost of delivering a two-bed apartment in Dublin is now as high as €592,000, according to the Department of Housing.
The department’s Total Development Cost Study assessed the cost of delivering four different building types – a three-bed semidetached house; a two-bed suburban apartment; a two-bed urban apartment and purpose-built student accommodation – in the Greater Dublin Area using specific “anonymised case study projects” dating from the first quarter of 2024.
It found the cost of delivering a two-bed apartment in Dublin ranged from €549,790 in the suburbs to €591,783 in urban areas.
The hard construction costs, effectively the bricks and mortar element, of the two-bed urban apartment was estimated at €266,058, which accounted for 46 per cent of total development costs. Apartments tend to be more expensive to build than houses because of the increased structural requirements, such as lifts, car-parking spaces and fire-safety regulations.
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The study, conducted by Dublin property consultants Mitchell McDermott, put the cost of a basement car-parking space at €34,229 per unit.
The so-called “soft” construction costs – land, development levies, professional fees, VAT, developers’ margins – accounted for the remainder of €591,783.
The land cost (including stamp duty and acquisition fees) came to €70,703 (12 per cent of the total) while the developer’s margin was put at €48,605 (8.4 per cent).
The overall cost of the two-bed apartment is seen rising to €615,527 when a 5 per cent construction cost inflation rate is assumed. The findings will feed into an increasingly heated debate about the cost of construction in Ireland that has accelerated in recent years on the back of higher input prices.
The report calculated the cost of delivering a three-bed five-person semidetached house in Dublin at €450,652 with hard construction costs put at €175,636. The land cost involved, which included stamp duty and acquisition fees, was put at €83,943. The cost of delivering a typical student accommodation unit was put at €207,033.
In the foreword, Minister for Housing Darragh O’Brien noted: “In some cases, a challenging gap exists between the total development costs and the market price of housing. Government understands this, and many first-time homeowners are being supported through Government initiatives such as the First Home Scheme, which helps to bridge the gap for buyers between their deposit and mortgage, and the purchase price of the home.”
“Further help is available under the Help-to-Buy scheme, which supports those eligible through a tax refund which can be used as a deposit payment for a new home. Both of these schemes have had a significant level of take-up,” he said.
“While Government have introduced immediate initiatives to help bridge the viability gap and activate supply, such as development levy waivers, Uisce Éireann connection charge rebates and the Croí Conaithe apartment activation scheme, we do need a more long-term approach,” he said.
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