We all have read and heard about the costs of construction being one of the barriers to the adequate provision of housing in Ireland. This is especially so in relation to apartment development. Now a recent report notes that Dublin is one of the top 10 most expensive cities in the world to build in. Construction costs are set to rise 8% this year along with an average construction cost per square meter of €2,374. Dublin ranks as the fifth most expensive city in Europe. The inflationary rate in costs puts Dublin in the global “hot” markets for this year, and the second highest inflationary market in Europe.
The report notes that the pressure points in the Irish market lie with a high demand for resources and labour. The skills shortage is leading to price inflation. This is all in a market being driven by commercial property and public projects construction. How is the residential market to recover to where it needs output to be if these increasing costs are already causing the sector to creak?
More needs to be done to attract people back to the industry. Over 100,000 jobs employees are needed up to 2020 to deliver targets set out in the housing strategy and the capital expenditure programme. Initiatives such as the shared apprentice scheme will aim to enable companies who would traditionally not take on apprentices to do so. The principle being participating companies would share the apprentice with other members so that if work lessened or was delayed the apprentice would move to another participating member and thereby provide consistent work and training for the apprentice.
New technologies and methods, use of data, BIM and programme management need to be looked at to unlock savings in the market also. The use of pre-fabricated structures, modular construction are all efficient ways to reduce the physical build time on site. More upskilling is needed in the regulatory sector such as fire safety to ensure that issuing fire safety certificates for these construction methods does not add to further delay and costs.
According to the latest survey, Dublin is now the eighth most expensive city in the world to build in, with construction costs per square metre of $2,606 (€2,374). New York is the most expensive with an average cost of $3,807 per sq m followed by San Francisco ($3,549 per sq m). In the European market, Zurich's rate of $3,528 per sq m makes it the most expensive. London is a distant second with a build cost of $3,213.99 per sq m. The UK's south is the fourth-most expensive European location at $2,617.28 per sq m while Dublin comes in fifth at $2,606 per sq m. The cheapest European city is Polish capital Warsaw, where it costs $782.05 per sq m.