Cost of building a house

Grolschevik

Simon Coveney just on radio saying that it currently costs a private developer 300k to build a single house.

Anyone know how that cost breaks down, and how much is down to government levies, taxes, etc, and how much would be profit?

Askthe EA

Grolschevik wrote: »

Simon Coveney just on radio saying that it currently costs a private developer 300k to build a single house.

Anyone know how that cost breaks down, and how much is down to government levies, taxes, etc, and how much would be profit?

Its a little disingenuous that one. A one off self build might cost that but with economies of scale, i expect its less in larger developments.

Did he say that was gross or net of land costs?

Grolschevik

Askthe EA wrote:

Did he say that was gross or net of land costs?

He didn't go into detail, just threw it out there, and the radio host (George Hook) repeated it a couple of times as fact.

I'm asking because it seems to be quite inflated to my mind...

Water John

George is a bit of a mullet, takes any old bait.
Heard some one say on radio today that, 40% of a house cost is actually taxes of various sorts, VAT, Income tax etc.

300K including site would cover a decent house in rural areas.

If that is his build figure, better off buying on the market, ready to move into, cheaper.

Grolschevik

To clarify, he implied 'per house' rather than saying 'single house'.

An accurate paraphrasing would be: "It costs a developer 300,000 to build a house".

Carawaystick

I think coveney referred to a house in Dublin costing that much to build

Lockedout2

http://godfreygrant.ie/2015/04/the-cost-of-building-a-house-in-ireland/

Here's one version

Per Unit: Amount:
Site Cost € 50,000
Build Cost @ €100 psf, Size Average 1,100 €110,000
Roads & Infrastructure € 15,000
Utility Connections € 2,000
Legal Fees on Acquisition and Disposal, Marketing, Estate Agency Fees. € 6,000
Architects, Quantity Surveyors, Consultants, Homebond and Stamp Duty. € 2,500
Part V Contributions € 5,000
Council Levies € 10,000
Cost of Finance € 7,500
Total Costs €208,000
Sale Price €236,080

Askthe EA

Lockedout2 wrote: »

http://godfreygrant.ie/2015/04/the-cost-of-building-a-house-in-ireland/

Here's one version

Per Unit: Amount:
Site Cost € 50,000
Build Cost @ €100 psf, Size Average 1,100 €110,000
Roads & Infrastructure € 15,000
Utility Connections € 2,000
Legal Fees on Acquisition and Disposal, Marketing, Estate Agency Fees. € 6,000
Architects, Quantity Surveyors, Consultants, Homebond and Stamp Duty. € 2,500
Part V Contributions € 5,000
Council Levies € 10,000
Cost of Finance € 7,500
Total Costs €208,000
Sale Price €236,080

And that's a dirt cheap site

bleary

Surveyors in Ireland released a report in May on this
https://www.scsi.ie/news/view?id=73
They estimated 330,000 based on costs incurred in a number of sites in Dublin but that included a margin of 38,000

4ensic15

VAT has to be charged on the finished product. Take 13% from €300k and you are left with €251k. Doesn't take much to go off target and its a zero sum game. Get let down by a supplier, have and archeological dig, bad weather, security trouble, market shift as completion nears etc.

enricoh

I read somewhere recently that builders borrowing for say an estate would be lucky to get the dough at 10% p.a off the banks

Gumbo

enricoh wrote: »

I read somewhere recently that builders borrowing for say an estate would be lucky to get the dough at 10% p.a off the banks

That would be a bargain. The projects I am involved in are getting he funding at 14% for 12 months. If not in and out within the 12 months then they have to go back in and agree a figure going forward.

4ensic15

Another change from previously is that architects, solicitors and builders providers no longer give as much credit as they used to. One time solicitors wouldn't charge for buying a site and would take a fee as each house was sold. Now money has to be paid upfront. This adds to the cashflow pressures and interest costs.

exaisle

4ensic15 wrote: »

VAT has to be charged on the finished product. Take 13% from €300k and you are left with €251k. Doesn't take much to go off target and its a zero sum game. Get let down by a supplier, have and archeological dig, bad weather, security trouble, market shift as completion nears etc.

Firstly, VAT is at 13.5% not 13% and if €300k includes VAT at 13.5%, then the VAT exclusive figure is €264,317......NOT €251k.....but that emphasises your point, I think! :-)

Sleepy

bleary wrote: »

Surveyors in Ireland released a report in May on this
https://www.scsi.ie/news/view?id=73
They estimated 330,000 based on costs incurred in a number of sites in Dublin but that included a margin of 38,000

There's an interesting figure in there of 8k Sales & Marketing costs. That seems rather excessive to me considering we're in a seller's market where housing is concerned.

Call me a cynic but I'm guessing a lot of that 8k is finding it's way into the pockets of the developers' wives, sons and daughters...

With the hard costs of construction coming to 150k, the government already possessing land banks (or able to acquire them cheaply through NAMA) and having much lower costs of finance (if it's required) it would seem like the Public Sector should be able to churn out large numbers of units much more easily than the private...

Gumbo

Sleepy wrote: »

There's an interesting figure in there of 8k Sales & Marketing costs. That seems rather excessive to me considering we're in a seller's market where housing is concerned.

Call me a cynic but I'm guessing a lot of that 8k is finding it's way into the pockets of the developers' wives, sons and daughters...

With the hard costs of construction coming to 150k, the government already possessing land banks (or able to acquire them cheaply through NAMA) and having much lower costs of finance (if it's required) it would seem like the Public Sector should be able to churn out large numbers of units much more easily than the private...

I think the reason the LA's are not building is to keep the money off the international balance sheet. I heard that by providing the funding to the housing agencies then the debt becomes internal and off the international sheets.

I may be over simplifying but it's that understanding that we have been told internally.

Askthe EA

Sleepy wrote: »

There's an interesting figure in there of 8k Sales & Marketing costs. That seems rather excessive to me considering we're in a seller's market where housing is concerned.

Call me a cynic but I'm guessing a lot of that 8k is finding it's way into the pockets of the developers' wives, sons and daughters...

...

You think?;

A One page ad in a national paper costs thousands of euros.

http://www.irishtimes.com/about-us/advertise/rate-card

Signage is a couple of hundred

Daft is a couple of hundred.

Sleepy

Yep. Taking out even a single one page ad for a property development would seem excessive to me and in the modern era, I'd question the value in print media advertising anyway. We're in a market where prospective house-buyers are hunting for properties. Signage at the site's entrance (or just down the road etc.) may cost a grand or so, a few hundred quid to keep the ads on Daft and MyHome until all units are sold. Even adding printing costs of brochures etc. and a salary for a sales person and I'd wager you could sell every unit in a 100 unit development for less than 80k.

Even scaling back to a 50 unit development that would be €1600 per unit. Obviously, there are large economies of scale in that the only real cost difference in selling 10 units or 100 units are the numbers of brochures to be printed and the time in handling each individual sale (solicitors, sales reps etc).

What I imagine is actually happening here is developers wives/kids are getting 6 figure salaries, or close to it, to act as sales reps in a market with huge under-supply and they're over-spending on advertising and "glamourous" launches etc. Either that or the developers have no real sense of cost control and are allowing estate agents to take percentages of sales prices for very little actual work. That's not a dig at you or your profession: a new build estate that's been built to any acceptable standard will sell itself in this market. It's like selling life rafts to drowning men.

riclad

Theres an article in the news 2 weeks ago,
it says developer is selling new apartments ,houses for 140-199 k
.
The cost of a house depends on cost of site , vat, various taxes,council fees .
those houses are designed as social housing ,
he probably got the sites for zero cost.
http://www.irishtimes.com/news/social-affairs/housing-co-op-offers-four-bed-homes-below-200-000-1.2675882
say take away maybe 20 per cent off the sale price .
to give the cost price.
i reckon it costs around 100k per house ,if the site cost is zero.

I think for a private builder it costs around 150k to build 1 apartment ,
including site cost .
maybe co ops, charitys have to pay less tax to build social housing .

Wtf an income of 79k is considered ok, for social housing ?
That covers most working people in ireland.