'Out of reach': Average new-build in Cork now €433k

NEW-BUILD housing costs in Cork have been described as an “enormous challenge and “out of reach”, with data showing couples need a combined salary of over €100,000 for a modest-sized home.

Cork has been listed among Ireland’s top three most unaffordable locations for first time buyers in a damning new report published by the Society of Chartered Surveyors.

Data in the report focuses on the true cost of new housing in Cork with an average of €433k required for the delivery of a three-bed semi.

This means that couples would need a combined salary of €104k to afford the purchase.

The corresponding figure for the Greater Dublin area is €127k, while in Galway it is €115K. The Society of Chartered Surveyors Ireland released the data as part of ‘The Real Cost of New Housing Delivery 2023’ report.

Cork North-Central TD, Colm Burke, said the difficulties facing first-time home buyers trying to borrow has only served to compound matters.

“Materials are high at the moment due to the inflationary cycle,” he said. 

“Obviously, labour costs are also quite high. It presents an enormous challenge because these figures put housing beyond the reach of an awful lot of people.”

“I really feel sorry for someone who has worked, who has saved and who has paid rent of about €1,800 only to be refused a mortgage by financial institutions. They wouldn’t be in rental accommodation only for the fact that they are paying the full rent of around €1,800. The problem now is the difficulties for people borrowing when they have a clear record of saving and a clear record of paying rent. Savings or rent are not being taken into account.”

PRACTICAL APPROACH

He is calling for a more practical approach to dealing with first-time home hunters.

“The way that financial institutions are assessing people is wrong. I have a huge issue with that. We need to be far more practical about how we treat house purchasers.”

Fianna Fáil councillor Seamus McGrath expressed concern at the Cork figures highlighted in the report, particularly for the delivery of a three-bed semi.

“This figure is exceptionally high and it does underline the need to continually look at how we can bring down the cost of housing. This number most likely includes a very large site value and that is something we still haven’t fully grappled with in this country in terms of trying to push down development land costs.”

The average cost to deliver a new three-bed semi ranges from €354,000 in the northwest, peaking at €461,000 in the greater Dublin area.

Chartered quantity surveyor Micheál Mahon, who was among those compiling the report, said the impact of covid and the conflict in Ukraine have been the main contributors to the increase in ‘hard costs’ in the last two years.

Despite the challenges, Mr Mahon said the SCSI’s analysis showed that government supports aimed at addressing viability and affordability are making a noticeable impact.

The report advised extra support be offered for modern methods of construction. This would aim to prevent rises to connection charges and levies, as well as ensure the planning process is usable and reduce cost for homeowners.