Approximately €140bn in public and private investment is required to fund the 300,000 new homes targeted by government by 2030, Ibec group Property Industry Ireland (PII) has said in a new report.
PII estimates those units will cost an average of €467,000 for houses, €584,500 for apartments and €257,600 for purpose-built student accommodation.
They will be split between private buyers (36%), the private rental sector (19%), social housing (36%), and affordable or cost rental housing (9%).
In terms of the cost of housing, the report gauges average land costs of €84,000 and development costs of €290,000, prior to VAT of €55,500 and a developer margin of €37,000.
The development costs can be broken down into construction costs, including contingency of €223,000, €8,000 in utility levies, €10,000 in professional fees, €17,000 in development contributions, €7,000 in sales, marketing and legals, and finance costs of €25,000.
The expected average sales price for apartments (€584,500) is raised by the higher development cost of €408,000, partially offset by lower land costs (€58,000).
Construction costs alone would total €306,000, and the developer margin increases to €49,000, according to the study, which PII commissioned KPMG to complete.
An estimated €21.4bn in recycling development capital, including land investment, will be required to achieve the State's target of 41,000 new homes this year, a figure that will rise €9.7bn to €31.1bn if the target of 60,000 new homes per year by 2030 is to be reached.
Of those 41,000, PII believes that 14,670 will be allotted for private buyers, 7,956 in private rental stock, 15,283 in social housing, and 3,091 in affordable units.
Under the Programme for Government, the annual target for new housing will increase to 43,000 in 2026, 48,000 in 2027, 52,000 in 2028, 56,000 in 2029, and 60,000 in 2030.
The group said that €29.6bn in long-term capital, primarily from institutional equity and debt sources, will be required to fund around 58,250 new private rental units across the multi-family, purpose-built student accommodation and single-family rental stock within the 300,000 homes targeted.
Furthermore, the State will need to invest 50.7bn in 118,300 social and affordable homes, excluding privately-owned Secure Tenancy Affordable Rental Investment Scheme and privately owned social housing lease portfolios, as part of the 2030 target.
"Identifying the funding sources for delivering these homes is only a first step – we need the right policy measures to ensure that Ireland is still an attractive location to invest," PII director David Howard and PII chair Ivan Gaine said in the foreword.
"This includes providing infrastructure - which is a precondition for the delivery of housing ... It also requires certainty – in both our taxation of investment and in our planning system.
"Finally, it requires a rental policy that aligns to our international competitors and ensures Ireland is at the forefront of attracting capital investment."
Photo: (l-r) Sharon Higgins, Executive Director, Membership and Sectors, Ibec, David Howard, Director, Property Industry Ireland, Minister for Housing, Local Government and Heritage, James Browne and Ivan Gaine, Chair, Property Industry Ireland at the Property Industry Ireland (PII) annual conference at the Radisson Blu, Golden Lane, Dublin. (Pic: Conor McCabe Photography)
