How much does it cost to build a house in Ireland in 2022?
How long is a piece of string?
As this is the single biggest investment most of us are likely to make, it is important that you are confident that your hard-earned (or borrowed) cash will be well spent. The costs of building residential houses and extensions are challenging to determine as there are many variables such as:
- Site conditions
- Number of rooms and storeys
- Kitchen and bathroom fitting designs
- Availability of contractors
The above items are just some of the factors to be considered. It can be a bit like buying a car e.g., are you going for a top of the range model
or a secondhand classic?
Where do I start?
As a starting point, the key issue will be the floor area of your new home or extension. This is where clever design can cut costs to ensure every square millimeter (or inch) is utilized and non-habitable space such as circulation corridors are minimized.
One thing we can be sure of telling you is that you cannot build a house in 2022 for the oft-quoted figure of €100 per square foot which probably dates from the last century. Even a self-builder could not deliver a new home, compliant with all current Building Regulations for that rate. If friends, who built houses, tell you otherwise, don’t believe them. Most people forget to include lots of things they had to fork out on like septic tanks and pre-construction outlays.
Based on tenders we received for new houses in the first quarter of 2022, a more realistic figure for building a one-off detached house in a rural area would be in the region of €2,250 per square meter (€210 per square foot). This figure would include having the work undertaken by a main contractor and VAT. It would also be based on a turn-key finish – ready to move into.
It would not include site purchase costs, Development Levies (€2,000 – €20,000 depending on the floor area and what Co. Council you are dealing with), professional fees (5-15%) or inflation.
The latter item reared its ugly head during 2021 because of construction personnel shortages, material shortages, Brexit-related delivery issues and of course, the pandemic. This led to an increase of up to 30% in building costs in some areas. It will be interesting to see if prices show a downturn during 2022 as some of these issues level off.
On 7th June 2022 BNP Paribas Construction Purchasing published its index for May which shows that cost pressures were “severe” in April 2022, the second-fastest rise in input prices since the survey began in June 2000, just behind the record posted in October 2021.
Annual inflation for building and construction materials was running at 18.2 per cent in April, whereas annual inflation for some materials such as metal and wood ranged between 50 per cent and 60 per cent.
In addition, average hourly total labour costs increased by 15.2 per cent in the construction sector during the first quarter of 2021 compared with a 4.9 per cent increase across all sectors during the same period.
The Royal Institute of the Architects of Ireland (RIAI) publish a consumer guide, Building/Construction Cost Guidelines which give gave indicative figures in 2019 as per the diagram below. The Society of Chartered Surveyors Ireland (SCSI) publish details on Tender Price Index Figures in 2021.
We strongly recommend careful consideration is given before embarking on a self-build / Direct Labour build if the intention is to try and reduce costs. This approach is not for the faint-hearted and should not be undertaken by anyone who does not have prior experience in the construction sector. The regulatory environment in which building is monitored has become increasingly complex and you do not need to discover a problem at the end of the project in obtaining certification.
You also need to estimate the cost and availability of your own time. A building project cannot be realistically managed by anyone with a nine to five, Monday to Friday job. We can talk about this with you in more detail if we are working together.
You may have assembled a huge scrapbook or Pinterest file of desired interior and exterior images, but it is good to bring an element of practicality to the process. A good start is to assess your pre-construction outlays rather than just focusing on the building cost as these can mount up and you will need to fund these yourself before a mortgage kicks in. These could include:
- Site purchase costs
- Stamp Duty
- Land Registration fee
- Gift Tax (if receiving a site from a relative)
- Site survey / marking out fee
- Site Valuer fees (for a mortgage)
- Solicitor’s fees
- Architect’s fees
- Specialist consultant fees e.g., archaeologist or flood risk assessment depending on the site
- Planning application costs
Trying to save on the professional fee for an architect may be a false economy when this is such a small part of the overall cost of building. In many cases, by making smart design decisions and having someone on your side who is experienced in project management and negotiating with builders, the cost of our fee is offset by the savings made regarding the building construction cost.
THIS ALL SOUNDS GOOD. BUT WHAT NEXT?
Just give us a call (059 8640013) or check out our page ‘Where to Start’.