The availability of land, access to finance, shortage of construction workers are significant factors delaying the delivery of affordable residential properties in Ireland, according to reports from the Department of Housing.
The problems are outlined in three reports on the cost of residential delivery in Ireland published by Minister for Housing Eoghan Murphy.
In a statement, he said the reports are important in terms of analysing key elements of Ireland's housing sector.
Mr Murphy said that building affordable apartments has been a challenge from a cost point of view.
The report 'Review of Delivery Costs and Viability for Affordable Residential Developments' notes that the demand for land, particularly in Dublin and Leinster area, reflects the increase in demand and could signal land becoming more of an investment commodity.
It says that it is causing a significant issue for the delivery of affordable residential properties to buy and rent and it recommends enhancing the use of State land portfolio.
Previous suggestions by Mr Murphy to change the restrictions for height limitations and the number of car park spaces for urban residential properties have also been reviewed.
The report says higher rise development, particularly over six storeys, is more expensive due to "the increased requirements from a structural and fire safety perspective".
It says that skills shortage in key construction areas is causing problems that affects delivery capacity and on wage inflation.
It also says that the availability of finance is improving. However, access to and the cost of finance for "residential schemes remains a significant challenge and is a substantial factor in development costs".
A reduction in VAT was also ruled out as EU VAT directive requirements are not achievable and would likely only result in further increases in land prices.
The construction industry has strongly argued for a VAT reduction to decrease the cost of building.
Minister Murphy said the Department of Housing has been working to address issues raised for some time.
He said that the department has already reviewed the design standards for new apartments in consultation with a range of stakeholders and the updated guidelines were published last month.
The National Planning Framework says an estimated 45,000 new homes are needed in Ireland's five cities out to 2020 and a minimum of 550,000 new homes across Ireland out to 2040.
