Responding to the most recent CSO Residential Property Price Index, IPAV, the Institute of Professional Auctioneers and Valuers, said it strongly supports the view of the ESRI that the cost of building homes must be driven down and called for the setting up of an official monthly index of input costs.
Pat Davitt, IPAV’s Chief Executive said there is “a lack of transparency” around the cost of building homes.
“It is difficult to see convergence between what people can afford to buy, what they are allowed to borrow under Central Bank rules and how we’re going to build the 340,000 homes the Central Bank estimates we need up to 2030. While a number of stakeholders have estimated input costs it is not at all clear that fully itemised costs are available in the market.
“We need an official index charting all building input costs, including costs of materials, regulation, employment, land prices and all other input costs, a full Bill of Quantities. Ideally it would be published on a monthly basis.
“At the moment we have a vast divergence in the price of similar properties in broadly comparable areas across the country and the question that needs to be asked is, do the prices currently being asked for residential properties in many areas include recovery of costs paid for land in the Celtic tiger era, and if it does should it not be written down,” Mr. Davitt remarked.
Mr. Davitt said when ‘Rebuilding Ireland’, the Government’s housing strategy was launched in July 2016 it committed to a detailed analysis of the issue and to publish the findings.
“To date we have not seen the outcome of such an analysis. It is critical that we have full transparency on building costs and root out the impediments to building affordable homes. It is something IPAV has been calling for for five years,” Mr. Davitt added.
He said people on average wages are forced into the rental market because they cannot acquire credit for homes on which it would be much cheaper to pay a mortgage than rent.
While overall the Central Bank mortgage rules play an important role they are having too severe an impact on first-time buyers and those with less family resources to help with a mortgage.