A report on the cost of house construction, to be brought to Cabinet on Thursday morning, has found that construction costs for houses and apartments are between 15% and 30% higher in Dublin than in comparable cities around Europe.
While labour costs are cited as a key factor, some of the lower costs are attributed to less stringent specifications in each of the four European cities which were compared with Dublin: Copenhagen in Denmark; Berlin in Germany; Utrecht in the Netherlands; and Birmingham in the UK.
The study, commissioned by the Department of Housing in partnership with bodies from the construction sector, found that construction costs account for approximately 50% of delivery costs. It was carried out last summer before the latest rise in building costs.
The findings of the cost comparison study will be brought by Minister for Housing Darragh O’Brien to Thursday’s meeting of the Cabinet. The research was carried out by construction economics consultant Mitchell McDermott, who compared the costs of homes built to Irish specifications in those cities, and then examined the actual costs of constructing those homes using the specifications of those countries.
The study found construction costs to build the same scheme house in Birmingham – to Dublin specifications – were 15% lower. However, with British specifications, the costs were as much as 29% lower.
Lower labour costs in the UK, as well as less expensive market conditions there, contributed to the lower costs, according to the study. The scope of builds in the UK has also tended to be lower, with fewer en suite bathrooms or fitted wardrobes as standard, for example. House sizes also tend to be a bit smaller in Birmingham – around 93sqm - than in Dublin – around 110sqm, the report found.
The cost of building apartments worked out at a similar cost in each of the five cities surveyed when using Irish build specifications. However, because a lower standard of specifications and finish were applied in some of the cities, it meant the construction costs for apartments in other cities were 30% lower.
The study also found lower construction costs were evident in the four European locations for student accommodation but mainly due to differences in scope, unit sizing and specification.
Electrical, plumbing and heating costs were also higher in Dublin than the four other cities, the study found.
Among the report's seven recommendations is the suggested development of standardised design specifications for student accommodation.
