Construction Materials: 2024 Cost Report

Dublin has been ranked amongst the five most expensive cities in Europe to build, according to Turner & Townsend’s International Construction Market Survey (ICMS) 2024, which was published last week. With construction costs averaging US$3,775 per square metre, Ireland’s capital is in the top 25 most expensive places globally  – the global report in full can be accessed at https://publications.turnerandtownsend.com/international-construction-market-survey-2024/regional-insights-and-data. 

The report highlights that, despite high costs, the Irish construction market shows signs of recovery and growth, driven by green investment opportunities and a strategic post-Brexit position. The IMF forecasts a GDP growth of 1.5% in 2024 and 2.5% in 2025 for Ireland, which stands out against the Euro area’s projected 0.8% growth​​. In terms of property prices, the Central Statistics Office (CSO) reports a 7.9% rise in property prices across Ireland in the 12 months leading to April 2024. Dublin saw an 8.8% increase in house prices and a 6.2% rise in apartment prices, with South Dublin experiencing the highest growth at 10.5%. The average cost of building apartments in Dublin is €3,414 per square metre​​. 

High property prices are a double-edged sword. While they reflect strong demand, they fail to overcome all of the factors that challenge project viability; they also exacerbate the affordability crisis, pushing the median price of a dwelling to €335,000 nationally, with prices in Dún Laoghaire-Rathdown peaking at €624,999​​.

Labour Shortages: A Persistent Challenge

Ireland’s construction industry is dealing with a severe shortage of skilled workers. Within Townmore, we are actively addressing this through a range of recruitment initiatives and outreach to second and third level students, encouraging them to consider a career in construction. Current estimates suggest that around 66,000 additional builders are needed annually to meet housing targets, with an additional 24,000 required for clean energy projects​​. This shortage is not confined to housing alone but also impacts large-scale renewable energy projects. 

Comparative Costs: Ireland vs. Europe and the World

Construction costs in Ireland are high by European standards but remain lower than in some global hotspots. For instance, Zurich and Geneva lead Europe with construction costs over US$5,000 per square metre, while New York City tops the global list at US$5,723 per square metre​​​​. Global geopolitical tensions and supply chain disruptions continue to impact negatively on construction costs. The Turner & Townsend report notes that while construction price inflation is beginning to cool, a backlog of projects is keeping costs elevated. The focus on net-zero carbon projects is reshaping investment patterns across Europe, driving up costs in cities like Amsterdam and Paris​​.

The Irish government is actively seeking to bridge the affordability gap through subsidies, albeit at a high cost. State supports can reach up to €150,000 per home, potentially amounting to €4.5 billion if applied to 10% of the housing programme​​, according to a recent RTE report (https://www.rte.ie/brainstorm/2024/0627/1427931-ireland-building-costs-new-houses/).

Separately, the Society of Chartered Surveyors Ireland (SCSI https://scsi.ie/category/latest-news/) estimates the cost of building a new three-bedroom house at €397,000 nationally, rising to €461,000 in the Greater Dublin Area. These figures are underpinned by Ireland’s slow and costly planning process and our wholly inadequate infrastructure to support the delivery of vital new homes across the country, all of which point to an urgent need for innovative solutions and a proactive policy approach to manage costs and improve affordability​​.

At Townmore, we are proud to be playing our part in delivering vital new homes, commercial buildings and healthcare projects across Ireland – if you are looking for your next career opportunity, contact us in confidence to explore current options, alternatively, you can view a selection of open roles at  https://townmore.ie/careers/.