Galway’s average house build prices edge towards €400,000
From this week's Galway City Tribune
Author: Our Reporter
~ 3 minutes read
From this week's Galway City Tribune
The average cost of delivering a new three-bed semi-detached home in Galway is €388,000, according to a comprehensive new report.
Published by the Society of Chartered Surveyors Ireland, the report also shows that the combined minimum salary levels required to purchase a new three-bed semi in Galway is €115,000 on average.
The Real Cost of New Housing Delivery 2023, which was launched recently at the SCSI’s national conference in Croke Park also revealed that the most unaffordable regions to the average first-time buyer are the Greater Dublin Area, Galway and Cork.
The combined average combined minimum salary levels required to purchase a new three-bed-semi-detached house in Galway is €115,000, based on an average 3.3 times Loan to Income Limit.
The corresponding figure for the GDA is €127,000, in Cork its €104,000 while in the Northwest it’s just €70,000.
The maximum first-time-buyers can borrow at is four times LTI, and in that situation the combined salary level figure required in Galway is €94,500.
Chartered Quantity Surveyor Micheál Mahon, one of the report’s authors, said the impact of Covid and the conflict in Ukraine had been the main contributors to the increase in ‘hard costs’ over the past two years.
“‘Hard costs’, which includes house-building costs, siteworks, and site development, ranged from just over €198,000 in the Northwest region to just over €228,000 in the GDA, representing approximately a 15% differential.
“The main hard cost drivers have been energy, fuel, and shipping costs,” said Mr Mahon.
“The cost of various building materials, particularly concrete, insulation, electrical and plumbing products, steel reinforcement, and timber products, also increased dramatically.
“Nationally, ‘hard costs’ now comprise 53% of the total costs of overall delivery, while ‘soft costs’ make up the remaining 47%. However, in the GDA, this balance shifts to 49% ‘hard costs’ and 51% ‘soft costs’. While cost inflation has increased very significantly in recent years, recent SCSI surveys indicate prices are levelling off.
“’Soft costs’ range from approximately €156,000 in the Northwest region to just over €233,000 in the GDA. The primary soft cost drivers have been land costs, financing due to higher interest rates, levies and an uplift in the cost of professional fees. On a national basis, land and acquisition costs (per unit) equate to 13% of overall delivery costs on average,” he added.
The President of the SCSI, Enda McGuane, – previously MD of Winters Property Management in Galway and now Asset Management Lead for the Land Development Agency – said that the report recommends that more needed to be done to support Modern Methods of Construction, pause future increases to connection charges and levies, as well as ensuring the planning process was fit for purpose to de-risk development and bring down cost, which potential homeowners ultimately pay.
“While there has been a significant increase in the supply of new housing towards current Housing for All, it is important that we update those targets considering Ireland’s population increases,” he said.
“Housing for All targets were based on the 2016 census, and the population has grown by 8%. Therefore, targets need an immediate revision, based on the most up-to-date census figures.
“When setting and committing to new targets, we would also urge the Government to establish new targets for the number of units delivered by off-site construction. This will facilitate a more efficient and sustainable use of resources through the rollout of Modern Methods of Construction.
“On the cost side, we would like to see the continued pausing of development levies made a long-term policy while improvements must be made to the utility connection process to reduce costly and time-consuming delays,” he added.
Pictured: Enda McGuane. . . more supports needed.
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