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Archive for March 21st, 2011

There was an entry on here last year that tried to capture the costs of building a house here in the Republic of Ireland, including the cost of sites, and to compare our costs with our neighbours across the border in Northern Ireland. This entry provides an update.

There are five main sources for the information

(1) The Irish Society of Chartered Surveyors (SCS) house rebuilding costs (which includes demolition and clearance) which was last updated in April 2010 with information researched in February 2010. These costs relate to the Republic of Ireland.

(2) The Association of British Insurers (ABI) /RICS Building Cost Information Service rebuilding costs (constantly updated). The calculator provided by the ABI is for the UK but you may select calculations by reference to a region such as Northern Ireland.

(3) The Department of the Environment Heritage and Local Government House Building Cost Index (updated monthly). This is for the Republic of Ireland and merely provides information as to the change in prices from one month to the next.

(4) The Irish Association of Self Builders provides extensive resources on costs but appears not to have been recently updated. There is construction cost service provided for a fee which includes input from quantity surveyors.

(5) DAFT.ie asking prices for sites in both the Republic and Northern Ireland.

The furniture.ie website might also be of assistance

The highlights are:

(1) Rebuilding costs appear to have increased by 1% in the Republic between Feb 2009 and Feb 2010 according to the SCS. According to the DoEHLG,  prices dropped 0.5% between 2009 and 2010 but increased by 1.5% between Jan 2010 and Jan 2011.

(2) Rebuilding costs in Northern Ireland appear to have increased by 9% (the exchange rate of GBP £1 = €1.15 has remained the same since last year so the increase reflects both the local increase in costs in Northern Ireland and also the cost in euros) since a year ago

(3) Rebuilding costs in Ireland are in the €116-179 psf range depending on region and type of building, in Northern Ireland the average across the six counties is GBP £67 (€77) psf – in other words costs, on a similar basis, are 51-132% higher in the Republic than in Northern Ireland

(4) Site costs continue to be all over the place in the Republic but appear from a non-scientific review to be cheaper for rural locations in the Republic but more expensive in the Republic for urban sites.

Here is a table of the latest rebuilding costs from the SCS as at February 2010.

This is the performance of the DoEHLG’s building cost index over the past two years showing a 0.53% decline between Jan 2009 and Jan 2010 and a 1.59% increase between Jan 2010 and Jan 2011.

There are some 10,000 sites presently on offer from DAFT.ie in the Republic. Because the prices shown are asking prices, it is not possible to conclude the going rate for settled prices but looking at asking prices the impression is that an unexceptional rural 0.5 acre site with full planning permission is still asking €50,000+ but it is also true that prices are all over the place with 1.5 acres with full planning permission in place asking €20,000. 0.5 acres sites with “views” – lakes, mountains, countryside, sea or close to a golf course – are still asking close to €100,000 but again prices are all over the place and there are 0.5 acres sites with “views” available for €20,000 asking. So it would seem from the comfort of an armchair that the site market is dysfunctional in that there is a wide range for asking prices for seemingly similar sites. This may be largely the government’s fault for failing to put in place a register of sale prices, though you would also have to question the contribution of auctioneers to the setting of asking prices. In terms of Dublin, again the disparity in asking prices makes it nigh impossible to discern the going rates. Northern Ireland presently has 1,250 sites for sale on DAFT.ie and again the prices quoted are asking prices but there appears to be more consistency in pricing with sites typically costing GBP £50-125,000 with no discernible distinction between general rural and urban locations. It seems from a basic review of asking prices that rural sites in the Republic are cheaper than in Northern Ireland and urban sites are far more expensive. Odd. Built house prices in the north would generally appear cheaper for urban areas and comparable with the Republic for rural areas. This would all seem to point to an arbitrage opportunity in the Republic to use Northern Irish companies to build houses.

As for building costs for new homes which would need strip out demolition and clearance from the rebuilding costs shown by the SCS but add in planning permission, architectural/engineer fees, connection to services and local authority levies, difficult to say but my sense is that they are from €80-150 psf depending on location and whether or not the home is a self-build. I cannot see any other conclusion but that the building costs in Northern Ireland are like-for-like far cheaper than the Republic’s.

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