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Apartment Costs Report confirms Private Sector cannot deliver Affordable Homes – Ó Broin

24 October, 2017 - by Eoin Ó Broin TD

Speaking after the launch of ‘The Real Costs of New Apartment Delivery’ by the Society of Chartered Surveyors Ireland, Sinn Féin Housing spokesperson Eoin Ó Broin TD said that “the report confirms that the private sector cannot deliver affordable homes, even if significant incentives and discounts were introduced”. The report surveys the cost of 28 apartment developments currently underway in Dublin.

Deputy Ó Broin said:

“I want to welcome the publication of ‘The Real Costs of New Apartment Delivery - analysis of affordability and viability’, by the Society of Chartered Surveyors Ireland. While the data is not comprehensive, it provides us with a valuable snapshot of a number of new apartment developments in Dublin.

“The report argues that the cost of multi-story apartments is higher than standard family homes. It further argues that there is a growing gap between the costs of building apartments and the market price, making apartment building unviable for developers and unaffordable for home buyers.

“The report details seven proposals for reducing the cost of apartment development, including reducing the cost of land, finance, construction through lowering of standards such as size and car parking requirements and reductions in VAT and development levies.

“Interestingly, when all of the proposed discounts are taken into account, it is a clear that the private sector still would not be able to deliver genuinely affordable homes.

“On the basis of the report’s figures, a two bed apartment in a low rise Dublin developments with an all-in cost of between €330,000 and €387,000 could be offered at between €269,000 to €317,000 if all the proposed discounts were applied.

“A two bed apartment in a medium rise development in Dublin currently priced at between €422,000 to €533,000 could be offered at between €321,000 to €412,000 if all the proposed discounts were offered.

“What this shows is that, even if a wide range of incentives and cost reductions were in place, private developers would not be in a position to deliver genuinely affordable homes in the apartment sector.

“Affordability means homes that households on incomes of between €45,000 and €75,000 can purchase; prices between €173,000 and €288,000. 

“While the Chartered Surveyors report suggests that the lowest possible price in their ideal scenario would hit the top end of this affordability range, this would only be the case if all of their proposed incentives and deductions were introduced, and even then the vast majority of those in need of affordable homes would be excluded.

“Today’s report should send a clear single to Government that the private sector cannot deliver affordable homes to those in greatest need. The report also confirms that although offering peace-meal incentives and deductions to developers would make things easier for home buyers earning over €90,000, it will do nothing for those on average incomes.

“What is needed is direct Government investment, through local authorities and approved housing bodies to deliver genuinely affordable homes at prices that average earners between €45,000 and €74,000 can afford.” 

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