The Society of Chartered Surveyors Ireland (SCSI) has called for “long-term planning” in Government budgets to drive down the cost of new housing, warning that increased construction costs are leading to many projects being paused or cancelled as they are “no longer financially viable”.
Launching its pre-budget submission on Friday, the SCSI said that the viability gap that exists between the construction cost and the market price for new home buyers is at “unsustainable levels in many parts of the country”.
The society has called on the Government to adopt longer-term plans across several budgets to drive down construction costs.
Kevin Hollingsworth, vice-president of the SCSI, said that the society wants to see “soft costs” such as development levies, high road closure fees, local authority licence fees and other duties tackled.
The SCSI has said it disagrees with the “counterproductive” introduction of a 5 per cent concrete levy earlier this month, which it said will contribute to construction costs.
The levy is designed to secure a construction sector contribution towards the cost of the mica redress scheme.
“While we understand that the Government wants to seek a contribution from relevant stakeholders to the cost of remediating defective homes, the introduction of a levy on concrete blocks and concrete pouring other than in precast products will further challenge the viability and affordability of new homes including apartments at a time when it should be doing everything possible to drive down costs and increase the output of new homes,” said Mr Hollingsworth.
He highlighted that there are also still “significant delays” with electricity and water connections that are hindering the completion of projects and having a knock-on effect on financing.
He said that steps need to be taken to resolve delays with connections, and to establish a “more efficient and streamlined service”, calling for further financial resources to be given to Uisce Éireann and local authorities to attract staff.
The society also recommended the introduction of a rebate that lowers the capital gains tax rate to 8 per cent, specifically for development land utilised for construction of new housing.
Chief executive of the SCSI, Shirley Coulter, said that this would “incentivise developers and investors to engage in the construction of new housing, address the ongoing shortage of supply and contribute to improved affordability and accessibility”.
The SCSI is also advocating for the establishment of a land price register, similar to the existing property price register, to promote transparency and fairness in land transactions and policy development.
On the rental market, the SCSI has called for the introduction of new taxation measures for landlords rather than currently taxing income at the marginal rate, as well as greater resourcing for the Residential Tenancies Board to improve the “time-consuming and inefficient” adjudication process for disputes and to allow the RTB to better monitor the wider rental market.
The SCSI has also called for the establishment of a national authority to oversee owner management companies that manage apartment developments on behalf of property owners.
