The main reasons for current price inflation is high price volatility across building materials – particularly insulation, cement, plasterboard metals, according to the Society of Chartered Surveyors Ireland (SCSI).
Their Real Cost of New Apartment Delivery reports published in 2017 and 2021 respectively showed that lower-rise suburban apartment delivery costs rose from €155,000 to €177,000 during the four-year period.
The report also highlights other factors such as labour cost increases following the implementation of the Sectoral Employment Order which came into effect on 1 February, 2022. It is expected that the Tender Price Index will also see some impact of this.
The SCSI was sharing insights on construction costs with the Joint Committee on Housing, Local Government and Heritage on Construction Costs. It is the long-standing view of the SCSI to tackle rising costs of construction, including the most recent building materials and labour hyperinflation. Mitigating measures to tackle the high costs of housing delivery will require a proactive and cohesive response from government.
The SCSI Real Cost of New House Delivery Report 2020 reported an increase in inflation on average by 12% between 2016 and 2020, which doesn’t take account of more recent increased inflation pressures. Their research found that the cost of delivering a new estate-type home (three-bedroom semi-detached) was €330,000 in 2016. That rose to €371,000 in 2020.