Cost of land and Build versus buying

butsy1981

Hi All

I’d really appreciate some advice and opinions here. I'm finally in a position to jump on the property ladder and am faced with the build versus buy dilemma.


Up to now wife and I had considered buying given there is apparently good value to be had at the moment. However we can’t see any real value in the area we’d most like to live in and are afraid to buy in an area we may later regret. Last week a site became available in our preferred area (a rural area of Cork not too far outside the city) and my wife and I reckon we’d get planning permission as her parents live quite near to the site and we have a housing demand as first time buyers.

We met with the guy that manages the land for the owner and he agrees that we would be in a good position get planning as its A3 zoned and we’d meet the criteria. He’s also an architect and he offered his services (for about €2.5K) in designing a house that would meet the requirements of Cork county council. We’re currently renting a house which is about 2000 sq ft and really want to own a similar sized house as we both work from home and need the space.

My big concern is the cost of building a house this size. I’d like to keep my mortgage at around 250K but would be willing to go up towards 275K at a push. I’ve heard stories from people I know that have built similar size houses in the past few years for between 180K (direct labour, excluding site) and 250K (contractor, excluding site).
The architect guy we spoke to reckoned we could easily build a house using a contractor for around €70 sq/ft with basic fittings, but I have my doubts about this after reading posts on this forum and reading the SCSI rebuild prices for detached houses in Cork are €164 / sq ft.

Also we don’t have a price for the site yet, as the owner is some old guy my father in law knows and he hasn’t given any guide price, but has asked us to make an offer. Similar sites in the area have an asking price of 95K for 0.7 of an acre through a real estate agent. I was thinking of making an initial offer of 60K as a starting point. So to sum up my main questions are:

1. Is 60K a reasonable first offer to make on a 0.7 acre site in Cork (subject to planning permission of course) given that nearby sites are asking for 95K, though not necessarily selling at this price?

2. Is €70 per square foot for a 2000 sq/ft build realistic if using a builder? If not, what would be more realistic? I’d be happy go get a house to a builders finish with just the kitchen and bathroom appliances and fittings and do the bedrooms and garden landscaping down the line. As I’m a newbie to this building lark, does the price per square foot typically include everything such as professional fees, appliances fittings etc?

BryanF

1. what is being quoted by auctioneers is clearly not what sites are actually going for.. but I've heard the expression 'a site is worth what your willing to pay for it' . how near Cork are we talking? if its within a 10 mile radius, 60k is worth a punt, and depending on the site and location, you may want to keep that price to yourself until you get planning and hand over the cash..
2. some claim its doable, what is not really discussed is how much is spent from 'builders finish' to sitting in front of the TV with nothing to do but cut the grass (as if that's ever a reality:D) AND what quality, performance, longevity, comfort, style etc you get at those sort of figures - at the other end of the scale, see here for some average passive house sqm costs http://www.constructireland.ie/Vol-5-Issue-8/Articles/Passive-Housing/Why-Ireland-is-becoming-a-leader-in-ultra-low-energy-building.html
   

best of luck with your project

isaos

This is an ideal time to buy a house, they are selling most of the time much lower than advertised for - and much cheaper than the cost of building them.. What you need to assess is the total value of your house once completed (and there are always pile of things that will add to the cost, as BryanF says) compared to what you would be paying now for its equivalent in the present market. And that might become quite a scary prospect.

New build in sight

It is also worth considering when buying that a house is rarely finished to your exacting standards, however when/if you build it is much closer to your wish list.... (never perfect, always budget depending )
Anyway what i mean is when, debating buy V's build, also remember to include what it would cost to alter or re model the house to buy rather than just build it to begin with. Also most houses already built would most likely not be to the standard of a brand new build. But you are right there is definately value out there at the moment but this also includes the building market too.

My opinion would be that you should build
And I agree that €70 per sqf is totally do-able, although perhaps i should reserve judgement until we have actually completed our build

And just so you know we have been quoted €50k for just under an acre in the midlands not far from the town.


Best of luck.

Stove Fan

I personally wouldn't build new unless your not going to sell for yonks and not bothered what it would be worth in years to come.

We bought a derelict 2 bed bungalow on a 0.56 of an acre with a river on the boundary in Kerry. Spent more than we bought the house for on extending and building a garage and a full renovation and have it on the market for 145,000 euro.

The market is dead and any buyers wan't a bargain at a give away price:( If we sell our house much lower we'll make a loss and thats not including my labour that I did myself.

Ours is done to a very good standard and there is nothing to do, simply move in.

My advice is look hard in the area your interested in online etc and I'm sure youll find something:)

Stove Fan:)

BryanF

New build in sight wrote: »

I agree that €70 per sqf is totally do-able, although perhaps i should reserve judgement until we have actually completed our build

??? prehaps you should..

isaos

Stove Fan wrote: »

I personally wouldn't build new unless your not going to sell for yonks and not bothered what it would be worth in years to come.

We bought a derelict 2 bed bungalow on a 0.56 of an acre with a river on the boundary in Kerry. Spent more than we bought the house for on extending and building a garage and a full renovation and have it on the market for 145,000 euro.

The market is dead and any buyers wan't a bargain at a give away price:( If we sell our house much lower we'll make a loss and thats not including my labour that I did myself.

Ours is done to a very good standard and there is nothing to do, simply move in.

My advice is look hard in the area your interested in online etc and I'm sure youll find something:)

Stove Fan:)

For info we just bought an old 2 story farmhouse, 3 bedrooms, 1996 Stanley range heating the whole house, great outbuildings, fab views, 5 miles from wellknown Kerry town on 5.5 acres of good land in south Kerry for €145.000. It was on the market in 2008 for €400.000, and was still on Daft for €270.000 when we made our offer.
We could have moved in but it needed a bit of renovation to make it really nice - meaning that total spend will be something around €180.000 for a really great great house.
lucky us...

AidanD12

I've been through similar thought process not far from Cork over the last 6 months and heading down the build route.
Bottom line is there is great value in either route but if its purely down to finances then I think you will get more "bang for buck" buying. imo the cost of building has not reduced as much as buying. I'll be building beside my sister who built in 2007 and the costs will probably be cheaper but not by a great deal. Having said that the standard should be higher. If you're not set on a particular spec house in a particular area (as I was) then you'll find a good house at a good price. On your specific questions
1) Site's are not selling so don't take much notice of asking prices. As Brian said its only worth what your willing to pay. 60K is prob higher than I'd offer.
2) €70/sqft is realistic for a builders finish of a basic A3 house but if you want higher spec / low energy you'll pay more.
Best of luck.

Eoghan Barra

As regards building, the cost of labour has come down considerably in the last few years but materials are mostly still at crazy prices, and obviously bear no relation whatever to the way property prices have collapsed.

The other point you should bear in mind is that if you go direct labour it will be cheaper than having a contractor look after everything, but you will have a serious amount of stress to deal with for a year or two.

I would say if you can find something close to what you want already built you'll save yourself a lot of money and grey hairs. But at the end of the day it really depends on your own personal preferences and circumstances.

Captain Bligh

butsy1981 wrote: »

Hi All

I’d really appreciate some advice and opinions here. I'm finally in a position to jump on the property ladder and am faced with the build versus buy dilemma.


Up to now wife and I had considered buying given there is apparently good value to be had at the moment. However we can’t see any real value in the area we’d most like to live in and are afraid to buy in an area we may later regret. Last week a site became available in our preferred area (a rural area of Cork not too far outside the city) and my wife and I reckon we’d get planning permission as her parents live quite near to the site and we have a housing demand as first time buyers.

We met with the guy that manages the land for the owner and he agrees that we would be in a good position get planning as its A3 zoned and we’d meet the criteria. He’s also an architect and he offered his services (for about €2.5K) in designing a house that would meet the requirements of Cork county council. We’re currently renting a house which is about 2000 sq ft and really want to own a similar sized house as we both work from home and need the space.

My big concern is the cost of building a house this size. I’d like to keep my mortgage at around 250K but would be willing to go up towards 275K at a push. I’ve heard stories from people I know that have built similar size houses in the past few years for between 180K (direct labour, excluding site) and 250K (contractor, excluding site).
The architect guy we spoke to reckoned we could easily build a house using a contractor for around €70 sq/ft with basic fittings, but I have my doubts about this after reading posts on this forum and reading the SCSI rebuild prices for detached houses in Cork are €164 / sq ft.

Also we don’t have a price for the site yet, as the owner is some old guy my father in law knows and he hasn’t given any guide price, but has asked us to make an offer. Similar sites in the area have an asking price of 95K for 0.7 of an acre through a real estate agent. I was thinking of making an initial offer of 60K as a starting point. So to sum up my main questions are:

1. Is 60K a reasonable first offer to make on a 0.7 acre site in Cork (subject to planning permission of course) given that nearby sites are asking for 95K, though not necessarily selling at this price?

2. Is €70 per square foot for a 2000 sq/ft build realistic if using a builder? If not, what would be more realistic? I’d be happy go get a house to a builders finish with just the kitchen and bathroom appliances and fittings and do the bedrooms and garden landscaping down the line. As I’m a newbie to this building lark, does the price per square foot typically include everything such as professional fees, appliances fittings etc?

Howdy, Recently built a 1550sqft incl sunroom, porch, pressurised plumbing, under floor heating, paths, drainage, kerbs, tarmac, entrance walls, painting in and out patio 2 WC's tiled etc etc etc

hang up your hat for 132000 including VAT with a reputable qualified insured homebonded builder with a contract in place stating start and finish dates!

Direct labour is a nightmare and if going that route factor all in including your time (spend same at your place of work and equate same) insurances, who is standing over the finished product, dont forget to also factor in the extra rent while waiting for the 2-3 years to build it and also the interest on your loan while waiting!!

also the trades smell you coming when direct labour. they want to catch you by the ankles and shake you till your pockets are empty.

food for thought, if every builder made (250k-180K) 70k per house built (used your figures above) after 2 years or 14 houses years he would have 1,000,000 yoyo i dont think so. i think all things considered, costs accuratly kept i think direct labour, in the current climate, would come in more expensive.

also the prices a contractor would give include all materials where as direct labour trades are labour only and then you buy the materials and dont underestimate the costs of the tiny items like screws glue chewing gum etc

best of luck

afkasurfjunkie

Captain Bligh wrote: »

Howdy, Recently built a 1550sqft incl sunroom, porch, pressurised plumbing, under floor heating, paths, drainage, kerbs, tarmac, entrance walls, painting in and out patio 2 WC's tiled etc etc etc

hang up your hat for 132000 including VAT with a reputable qualified insured homebonded builder with a contract in place stating start and finish dates!

Direct labour is a nightmare and if going that route factor all in including your time (spend same at your place of work and equate same) insurances, who is standing over the finished product, dont forget to also factor in the extra rent while waiting for the 2-3 years to build it and also the interest on your loan while waiting!!

also the trades smell you coming when direct labour. they want to catch you by the ankles and shake you till your pockets are empty.

food for thought, if every builder made (250k-180K) 70k per house built (used your figures above) after 2 years or 14 houses years he would have 1,000,000 yoyo i dont think so. i think all things considered, costs accuratly kept i think direct labour, in the current climate, would come in more expensive.

also the prices a contractor would give include all materials where as direct labour trades are labour only and then you buy the materials and dont underestimate the costs of the tiny items like screws glue chewing gum etc

best of luck

do you mind me asking in what part of the country this was in?

Captain Bligh

afkasurfjunkie wrote: »

do you mind me asking in what part of the country this was in?

Gods garden,
Where beautiful women & men roam free,
where the sun always shines,
where 100,000 people go out and march for what they believe in (removing the manager!) but where only a few go out and march againest austerity, poverty and bank bailouts,

none other than the County of Cork

butsy1981

Thanks for all the responses and feedback. I had nearly forgotten about this post. We've agreed a price with the landowner of 70k for 0.8 of an acre subject to planning and are currently filling in mortgage application forms. So all going well there, next step is to get the solicitors involved to draw up contracts and then start the design and planning process with our architect. We have a long year or two ahead of us id say, but the area is right for us so i hope it will all work out. Id be surprised if we even start building this year as I've heard from others that 6 months is not uncommon for getting planning permission granted from cork coco. I've decided to plan for 90 a sq foot to be safe and we definitely will be going with a building contractor as I wouldn't have the time for direct labour. Im sure ill be back with more questions as things progress. thanks again.

djd80

Captain Bligh wrote: »

Howdy, Recently built a 1550sqft incl sunroom, porch, pressurised plumbing, under floor heating, paths, drainage, kerbs, tarmac, entrance walls, painting in and out patio 2 WC's tiled etc etc etc

hang up your hat for 132000 including VAT with a reputable qualified insured homebonded builder with a contract in place stating start and finish dates!

Hi captain

Do you mind telling me which builder you used? Having a look around in Cork for quotes at the moment.

muffler

djd80 wrote: »

Hi captain

Do you mind telling me which builder you used? Having a look around in Cork for quotes at the moment.

Sorry, that account is now closed.