‘High-rise units cost too much to build’

A key part of plan to halt homelessness queried

A KEY element of Eoghan Murphy’s building plan to tackle the housing crisis has been dealt a body blow as experts say highrise apartments are too costly to build.

Paul Mitchell, of the Society of Chartered Surveyors Ireland told the Irish Daily Mail: ‘The higher you go the more expensive it is.’

He was speaking as a new report by the society shows that it could cost as much as €578,000 to build a two-bed apartment in a five- to eight-storey block in Dublin city. In sharp contrast, the report stated, it costs just over half that, €293,000, to build a two-bed low-rise apartment in the greater Dublin area.

‘The Real Costs of New Apartment Delivery’ report, published today, says the Housing Minister’s plan to build higher blocks is ‘not commercially viable’ as they cost too much to erect.

Minister Murphy is set to scrap the six-storey height restriction on apartment blocks in city centres across the country, raising it to at least ten storeys.

But Mr Mitchell, chairman of the SCSI working group that authored the report, said: ‘The most expensive apartments are the medium-rise ones in the city. Our research shows the higher you go the greater the costs.

‘These buildings have a more complex structure and require a wider range of mechanical and electrical services, sophisticated facades, basement parking and much more.’ He told the Mail: ‘You wouldn’t see a massive increase in costs from building an eight-storey apartment block and a nine- or ten-storey.’

Another astonishing estimation in the report is that a firsttime buyer couple would need a combined salary of up to €129,000 to purchase a two-bed apartment in Dublin.

The sales price of two-bed apartments range from €338,000 to €361,000 to €383,000, according to the report. A first-time buyer couple would need a deposit ranging from €34,000 to €50,000 and a combined salary of €87,000 to €129,000. But a couple with the joint income of €90,000 with a deposit of €34,000 would only be able to get a mortgage of €338,000. And just 20% of households earn over €80,000 a year, according to CSO figures.

Surveyors said costs could be cut by providing better-serviced land, flexibility in design and improved rates and access to financing.

Mr Murphy’s spokesman said: ‘The cost of delivery of apartments or any residential accommodation depends on a number of variable input costs including land, finance and construction and in turn viability depends on cost of delivery versus sales prices, which vary from location to location. In general, the cost of construction does increase with height for a number of reasons – structural requirements, fire safety requirements and greater preliminaries.

‘In relation to apartment building the minister has instigated a review of the apartment guidelines addressing the provision of car parking and other measures to reduce costs.’