LAST UPDATE | 4 May 2023
A COST OF construction review that went to Cabinet today shows that construction costs of the same type of houses built in Birmingham are 21% to 29% lower than a typical house built in Dublin.
The review, which was carried out by construction economics consultant Mitchell McDermott, compares the cost of construction across a number of countries.
It reveals that the cost per square metre of building the same scheme house in Birmingham compared to Dublin is approximately 15% lower.
Housing for All commits to conducting an analysis of the cost of house and apartment development.
Construction costs account for approximately 50% of delivery costs.
The study carried out a comparative study across four cities – Copenhagen, Berlin, Utrecht and Birmingham. In Ireland, Dublin was the selected city for comparison purposes.
The analysis of the cost modelling found that the differing prices between Dublin and Birmingham are due to a combination of differences in local market conditions and labour costs in the UK, as well as differences in scope such as no ensuites or fitted wardrobes and differences in sizing.
Houses of 93 square metres were common in Birmingham as opposed to houses in Dublin that are more typically around 110 square metres or larger if built by the private sector.
When looking at apartment building costs, the review found that building the same type of apartment to the same specification as in Dublin would cost similar amounts in the four European locations reviewed.
However, the construction cost for the apartment built to the actual specification in these locations can be up to 30% lower.
This is due to differences in scope, specification and unit sizing, the report states.
The report finds that in the European locations reviewed it is common to sell or rent apartments with exposed concrete slabs – such as bare ceilings and no floor finish.
It is also common for apartments to have no fitted wardrobes, no light fittings and sometimes minimal or no fitted kitchen.
In addition, it is common for apartments to have a single bathroom shared between two or three bedrooms and no ensuites.
Speaking about the report today, Taoiseach Leo Varadkar said the report confirmed what is already known – that it costs more to build in Ireland than in other places.
Some of the reasons for that are also outlined, he said, such as “construction workers get paid more in Ireland than they do in many other countries. I don’t think that’s a bad thing, by the way”.
“We need to attract construction workers into Ireland, we need to attract people into the construction industry. And also in many cases, our standards are higher, for example, we require natural light, we require ensuite bathrooms, I’m not sure that’s a bad idea either,” he said.
“Yes, of course, we will always compare what happens in other countries and are open to modifying building standards standards, but we don’t want to reduce construction workers pay. We don’t want to lower the quality of what we build here,” said Varadkar.
In terms of student accommodation, the review finds that lower construction costs were evident in the European locations. On a cost-per-sqm rate, the costs were about 10% to 32% in difference.
Again, this is due to differences in scope, unit sizing and specification, while the study also found that Dublin typically builds a different typology to that in the European locations.
These European locations design and build more studio / 1-bedroom units as opposed to the six to eight beds per cluster arrangement which are common in Dublin.
Building services, such as electrical, plumbing, heating and ventilation costs, were found to be higher in Dublin than in other locations across all dwelling types.
It is understood the report’s findings will feed into developing future policy measures by the Government, including some of the key actions recommended, which include developing standardised approaches to the design of housing with a move towards more simplified layouts.
The review recommends more standardised specifications and components, particularly in areas such as student accommodation.
The delivery of a training and awareness programme, in relation to the cost impact of materials and finishes commonly used in the residential construction sector, is also recommended.
More modern methods of construction (MMC) and innovative construction are recommended, including open-source construction details, to include promotion of design for manufacture and assembly approaches, such as modular builds.
A review of external wall build-ups is also recommended for new houses and apartments to assess and test alternatives that might work in Irish climatic conditions.
It is also recommended that construction costs and ‘soft’ costs, such as fees and land fees are incorporated into overall development costs.
The report comes just days after the Government announced a series of measures to boost building such as subsidising cost-rental builds and scrapping developer levies.
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