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Moves to Support Housing Delivery

A recently commissioned  cost comparison study from Mitchell McDermot,  which found that the cost of constructing homes in Dublin is 15-30% higher than in four other comparable European cities, has been presented to the Cabinet this week. The study cited higher labour costs in Ireland as the key factor, but also noted that added features and specifications of homes in Dublin, such as en suites and fitted wardrobes, contribute to the higher cost. The four cities used for comparison were Copenhagen, Berlin, Utrecht, and Birmingham.

The study found that construction costs to build the same scheme house in Birmingham with Dublin specifications were 15% lower, while with British specifications, the costs were as much as 29% lower. Also, apartments in Dublin cost the same to build as those in the other four cities when using Irish specifications, but apartments in other cities were up to 30% cheaper due to lower standards of specifications and finishes. To address these issues, the report recommends a more standardised approach to the design of housing, which could lead to cost reduction and opportunities. It also suggests developing standard design specifications for student accommodation and promoting more offsite and other modern methods of construction (MMC), including open-source construction details and design for manufacture and assembly approaches such as modular builds. 

Significantly – for Lotus IG home builders – the report’s findings are expected to inform future policy measures by the Government, including developing more standardised approaches to the design of housing and reviewing external wall build-ups for new houses and apartments to assess and test alternatives that might work in Irish climatic conditions.

In other news, the recently introduced rezoned land tax (RZLT), which is aimed at encouraging landowners to activate existing zoned and serviced residential development land for housing, replaces the existing vacant site levy. It will begin at 3% of market value and apply to a broader range of land than the previous levy. The tax aims to end land hoarding rather than raise revenue. Maps showing the areas affected by the tax will be finalised in December (landowners are strongly urged to check these maps), and the tax will apply from next year. However, falling planning permissions are causing concern, despite a 19% increase in dwelling completions in Q1 2023 compared to last year. This highlights the importance of initiatives such as the RZLT and the need for streamlined processes to reduce the administrative burden in delivering major capital projects. 

Finally, the Government’s recent reconstitution of the Project Ireland 2040 Delivery Board, which oversees the delivery of the National Development Plan (NDP), will also help to improve project delivery in areas such as housing, health, and climate. By reducing costs and improving delivery, these initiatives will ultimately help to address the country’s housing crisis and provide vital infrastructure for citizens.

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group