Tag Archives: real estate
Chartered surveyors in Ireland hit out at high additional costs for new homes
The Irish government needs to address a trend in the country’s housing market which means that actual construction costs for new homes are less than half of the total price paid by buyers. A new report from the Society of Chartered Surveyors has found that the cost of building a three bedroom semi-detached house in the Greater Dublin area, for example, is over €330,000. But the actual cost of building the house, known as hard costs, came to €150,000, which at 45% is less than half of the overall cost of providing that house. This was broken down as land and acquisition costs of €57,500 or 17%, VAT of €39,000 or 12% and a margin of €38,000 or 11% as the main elements of the soft costs which total €180,000. Micheal Mahon of the SCSI said it may come as a surprise to those outside the industry to see that the actual construction costs or hard costs made up less than half of the total costs. He said this was an issue which required urgent and focused attention from Government. ‘The country is experiencing a chronic housing shortage which is contributing significantly to the current homelessness crisis. The findings of this report highlight a number of pressing issues, particularly on the soft cost side. We need to kick start housing supply as soon as possible and to accelerate from the current output of 12,000 units per annum to the 25,000 units which is required,’ he pointed out. The report is based on a detailed study of eight house building projects with a minimum of 30 units in the Greater Dublin area where chartered quantity surveyors were employed as independent cost consultants. It shows that the cost of building a new house in Dublin is now €45,000 more than the median asking price of a three bed semi-detached house in the city according to a recent MyHome.ie/Davy property report. The study found that the cost of building the house from foundations to roof and completing the estate roads and drains etc is €150,000. In addition to the soft costs listed above there were levies of €12,000 or 4%, some €5,500 or 2% for professional fees and sales and marketing costs of €8,000 or 3% to bring total soft costs to €180,000. The report provides an analysis of a number of cost reduction options. Mahon said it is up to policy makers to decide which measures to implement to support the early delivery of supply. ‘Whether they opt to reduce VAT to 9% or to zero as is the situation in Northern Ireland or to reduce finance costs to 5% or to reduce levies to €1,500 or to increase the supply of land, prompt and decisive action is needed. They may well opt for a combination of these measures. However the focus should… Continue reading
Official data shows home building starts falling in England in first quarter of 2016
The UK government has pledged to build a million new homes in the next five years but the latest construction figures show that in the first quarter of 2016 building starts were down. The data from the Department of Communities and Local Government (DGLC), shows that there were 35,530 house building starts in England, down 3% when compared to the final quarter of 2015. Completions were estimated at 32,950, some 9% lower than the previous quarter and 3% lower than a year ago while annual housing starts totalled 139,680 in 2015/2016, up by 12% compared with 2014/2015. This highlights that the first three months of 2016 saw a slowdown’ A breakdown of the figures show that private enterprise housing starts were 3% lower in the March quarter of 2016 compared to the previous quarter whereas completions were 7% lower. Starts by housing associations were 9% lower compared to the last quarter and completions 24% lower. Overall starts are now 107% above the trough in the March quarter of 2009 but 27% below the March quarter 2007 peak. Completions are 33% above the trough in the March quarter 2013 and 32% below their March quarter 2007 peak. Starts were broadly steady from 2003/2004, averaging around 44,000 units each quarter until late 2007. Starts were strongly affected by the economic downturn from the start of 2008 when there was a period of rapid decline to a trough in the March quarter of 2009. Completions increased gradually from 2003/2004 reaching a similar level to starts by 2007. Completions fell more slowly than starts during the downturn, but over a longer period. The data reveals that from 2009 starts began to recover and during the next two years both series converged and levelled out. More recently, despite fluctuations, starts and completions have started to grow again gradually. The slower start to the year is echoed in figures from the National House Building Council (NHBC) which show a fall of 8% in new home registrations with the NHBC over the past three months compared with the previous three. During the quarter there were 25,133 new home plots registered in the private sector, a 10% decrease compared to last year’s 27,809. In the public sector there were 8,118 new homes registered, which is a 3% decrease compared to last year’s 8,402. However, there was an increase in February. The 12,181 new homes registered in February 2016 was 4% higher than in February 2015. February’s total was made up of 9,632 private sector homes and 2,549 from the public sector. Growth came entirely from the private sector which saw an increase of 6% compared to the same period last year. There were 33,251 new home registrations in the rolling quarter December 2015 to February 2016, fall of 8% on the same period 12 months ago. By contrast, the number of completions continues to rise, up 6% on the same period 12 months ago. As the leading warranty and insurance provider for new… Continue reading
Research reveals UK house hunters like a more personal service from estate agents
Some 58% of UK house hunters want life long, personal relationships with estate agents with an accumulative understanding of their property needs, new research suggests. The study from cloud based estate agency software provider Dezrez, looks at the attitudes, perceptions and expectations that UK home buyers have towards estate agents and online tools. It found that the majority of respondents, 93%, search for properties online, while 54% said that they would use a mixture of online tools and estate agents to deal with the entire property buying process. Some of home buyers said they would actually prefer to have a personal agent who can deal with the whole management of the home buying process. Those surveyed also admitted to relying heavily on estate agents’ expertise for key parts of the home buying process including with 72% for conveyancing, 62% to arrange viewings and inspect properties, 53% to make an offer and 42% for financial negotiations. ‘Buying or selling a home can be an extremely stressful and daunting process and good quality customer service still carries a huge amount of weight. Estate agents are well placed to offer sound, expert advice. They can help to alleviate some of the pressures and concerns that consumers have with managing the process themselves,’ said Justin Morris, chief executive officer of Dezrez. ‘What we are experiencing in the property market is some interesting trends that are mirroring consumer activity on the high street. Whilst many people like to be able to search online, they clearly value the customer experience and human touch of face to face interactions. However, without the personal touch online only services aren’t necessarily going to be in the position to replace traditional agents,’ he explained. The research also highlights consumer frustration with agents who are slower to adopt newer digital technologies. Some 67% of respondents believe that estate agents are not fully using technology to their advantage and 44% strongly agree that estate agents need to adopt, and embrace technology, in order to survive in the future. ‘There is a real appetite for change from both estate agents and consumers, especially when it comes to the use of technology. Advancements in technology, from mobile devices to cloud based software offer some amazing opportunities for the estate agent of the future. It gives them greater accessibility and freedom, and helps them to alleviate some of the pressures experienced by home buyers and sellers,’ Dezrez pointed out. ‘ There’s a breadth of technology that can help transform the property industry and enable agents to deliver a professional and personal service across human and digital touchpoints. In order to survive, and thrive, estate agents must recognise and remain confident, that they too have the tools available to remain competitive and keep customers satisfied,’ he added. Continue reading
