Government will struggle to hit this year’s target of building 33,450 new homes without extra supports for builders and buyers, experts warn.
Multinational consulting engineers Aecom agree with most estimates that new home building in the Republic topped the Government’s 29,000 target, in a report published on Thursday.
“However, it may struggle to achieve its higher 2024 target of 33,450 new homes,” says the firm, which argues that this will need extra affordability aids, incentives and increased social housing construction.
Aecom notes that State funding for new homes, through local councils and the Land Development Agency, along with affordability schemes, help boost home building.
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Its review of Irish construction acknowledges that Government’s Budget 2024 pledge to increase spending on house building should “lead to increased volume in 2024″.
In Northern Ireland, Aecom predicts that demand for homes will remain strong. House prices in the region rose 2.3 per cent over the 12 months to last August, despite multiple interest rate hikes, the firm notes.
The Department of Housing, Local Government and Heritage maintained that it was on the right track to continue increasing the supply of new homes in the Republic.
“In fact, the Government has taken significant steps to ensure this momentum is maintained and to ensure the viability of building homes,” a statement said.
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Aecom believes a slowdown in commercial building will keep total construction output in the Republic at €32 billion this year, in line with 2023.
But the department pointed out that independent body Euroconstruct recently predicted that the industry here will grow 3.2 per cent this year, bucking the rest of Europe, where construction is likely to dip.
Hubert Fitzpatrick, director general of the Construction Industry Federation (CIF), said the organisation’s outlook for this year was positive.
“Our most recent member sentiment survey indicated an increase in house building, civil and general construction,” he pointed out.
Mr Fitzpatrick stressed that as the industry moved into 2024 it needed the Government to commit clearly to implementing the National Development Plan.
“This will enable the industry to grow and deliver on the required ambitions to support the needs of a growing population and maintain our country’s competitiveness,” he argued.
Aecom’s review says the Government is giving “much-needed” signals that preparations are under way for big National Development Plan projects such as the Metrolink and Dart light rail extensions.
Historically “stop-start” State spending on big infrastructure hindered the industry, its report notes.
In Northern Ireland, even with Stormont suspended, public-sector building continues, mostly down to universities and councils, the firm says.
Construction is closely linked on both sides of the Border and the engineering consultancy suggests that a lack of capacity and value in the Republic could help push investors into the North.
John O’Regan, Aecom director and Ireland country lead, said there was “good cause” for optimism about this year.
“Overall, Ireland’s economy is in a positive place,” he argued. “There is continued strong growth with mechanisms in place to ensure that capital investment continues at a consistent rate.”
