Housing for All – Residential Construction Cost Study published supporting the delivery of economically sustainable housing in the long-term
The Cabinet today (Thursday 4 May) agreed the publication of the Residential Construction Cost Study Report, a joint initiative of the Construction Sector Group and the government under the Housing for All strategy. The study promotes measures for a reduction in residential construction cost and increased standardisation in residential construction activities.
The study is another component of the Housing for All plan – specifically dealing with productivity, cost reduction and innovation in the construction sector to help make the delivery of housing more economically sustainable in the long-term.
These actions complement a range of other actions in Housing for All to help achieve economic sustainability including the development of Modern Methods of Construction and the establishment of ‘ConstructInnovate’, the new construction technology centre hosted by University of Galway.
Welcoming the report, Minister for Housing, Local Government and Heritage, Darragh O’Brien, said:
“While we are focused on many of the immediate challenges we are facing in housing, we are also committed to developing a long term robust construction sector which develops an improved and sustainable housing market in terms of volume and value. This report is an important contribution to that work.
“I’d like to thank all from the Construction Sector – including representatives from the Society of Chartered Surveyors of Ireland (SCSI), Royal Institute of Architects of Ireland (RIAI), Construction Industry Federation(CIF) and Local Government Management Agency LGMA), the Construction Sector Group (CSG) – and the wide range of industry, local government and public sector participants who gave their time and expertise to this study and I look forward to continuing collaboration with them throughout the development and implementation of these actions.”
With regard to residential development, construction costs consisting mainly of direct materials and labour account for about 50% of total development costs. This study is focused on the construction costs only and acknowledges work which has been done, and further work to be done, in examining the other 50% of development costs, which as sometimes referred to as soft costs (for example: site acquisition costs, professional fees, cost of financing, margins, VAT, marketing).
The study undertook an international comparative approach using four Irish case study projects – a semi-detached three-bedroomed scheme house, a suburban apartment building, an urban apartment building and a purpose-built student accommodation building. Costs in Dublin were compared with Birmingham, Berlin, Copenhagen and Utrecht. A number of findings were made and are detailed in the full report, along with recommendations and actions for implementation. When costed in the European comparator cities the cost of constructing the same apartment was broadly the same. The cost of building the same house was 15% less in Birmingham. Proposed actions to reduce construction costs are related to specification (standardisation, typologies and finishes) and scope of works (fixtures and fittings, appliance) and size and are laid out in detail within the report.
A collaborative approach with industry to develop standardised approaches for housing design and construction which can inform the design of policy initiatives and be used as best practice by industry is proposed by the actions to realise the cost reduction opportunities identified by the report.