Fact check - delivering a house for €300k?

Required Cost Buildup For 300k House

I've previously written about what would have been required to deliver a house for €250k - seems an age ago when we didn't know about this thing called Covid (https://bit.ly/250kHouse).

Housing delivery at €300k is now spoken about as a target (115sq m semi detached house). In summary - it is quite hard to do so - especially with this target assuming no profit/contingency.

Construction Cost Buildup 115 sq m House

Off site construction may be part of the solution to lowering costs, however, the real advantages of OSM may not kick in until high volume is achieved given the large fixed cost base of off site construction companies - requiring high utilisation to achieve low costs. It’s a bit of a chicken and egg situation given the large investment in OSM factories required in advance of demand appearing in a market.

The LDA are being tasked with delivering homes of state owned lands. Given the governance requirements around being careful with the public purse it is apparent now that this approach is a slow and risk minimising approach. The LDA recent report on relevant public land identified sites for 67,000 affordable homes on 83 state owned sites. The published average estimated development costs are generally above €300k - it is not an easily reached target even for the public sector with a not for profit mandate.

Actual Costs v Hypothetical Cost to deliver 115 sq m semi detached house

However, given the government take from incremental house building being high there may be positive cost benefit ratios - not though without significant distortion to the market that may have state aid and competition impacts.

Estimated Exchequer Receipts On Construction of €306k House

One thing that is given minimal consideration is the fact that these analyses typically consider development on a standalone site - not the reality of development of multiple small, medium and large sites in parallel with differing risk profiles.