Mr. Tom Parlon:

It is a very valid question. The chartered surveyors have come forward with a number of costings recently and one that will be publicised very soon suggests that on a typical €300,000 starter home in Dublin, the actual construction costs are about €150,000, which is about half of the end cost. After it has been constructed, the site, VAT, levies, and Part V contribution have to be provided for, which is currently about half of the end cost. I saw a presentation on the economies of scale which suggested that if one were to build 500 units, it would be fine. However, it is difficult to build five at the moment because of existing difficulties. The industry would face up to the challenge of the economies of scale. Overall, the industry is fulfilling massive projects at the moment. I will name two within fairly close proximity to Dublin.

Facebook is constructing a data centre in Clonee, County Meath, which is worth close to €1 billion. The efficiencies brought in there are absolutely world class, whether it be lean construction, building information modelling, BIM, or all of the modern stuff that brings more efficiencies. That is what our members are obliged to do and are embracing. Likewise, Bristol-Myers Squibb is building a fabulous new facility to build one of the most advanced cancer drugs in the world. If the opportunity is available, the house building industry will step up to the mark. However, due to the lack of scale we know there is massive pressure around at present. On the wage side, we believe we pay a substantial wage. We are in engagement with the unions at this stage, but certainly we do not see that there is much scope to reduce the cost of labour on sites. It is a very labour intensive industry. Most commentators are saying that the 10,000 extra houses we would like to build would provide 25,000 jobs.

In terms of the other materials, there is not a great deal of scope. If there is increased demand, there is pressure. The industry certainly will face up to finding efficiencies there, but we genuinely do not see that there is much scope to reduce the bill cost. If one compares our hard building costs internationally, we are very much in line with what is the norm in Europe at present.