There is little hope of easing the housing crisis amid a shortage of construction skills and subdued new starts, according to a report from banking lobby group Banking and Payments Federation Ireland (BPFI).
The BPFI’s latest housing monitor shows that 33,000 new homes were finished in the 12 months to the end of September. That was 4 per cent higher than a year ago and would imply a total of 35,000 new homes for the full year.
Still, commencements stand at about the same level as 2016, when the economy was still recovering from the property crash and ensuing financial crisis.
“Looking at the current commencement activity in the residential construction sector, it looks challenging for the sector to increase output significantly after 2026 unless we see a significant increase in the commencement activity in the first half of next year,” BPFI chief executive Brian Hayes said.
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“There still seems to be skills gaps for certain occupations in the wider sector, and especially in the occupation groups where the residential construction sector heavily relies on in order to increase output significantly.”
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The report highlights the issues the Government faces if it is to hit its new housing target of 300,000 extra homes by 2030. It is taking longer to complete a new home once construction has begun, adding to the difficulty in easing the crisis. The slowdown in completions is impacting both houses and apartments.
Just 10 per cent of homes that began construction in 2024 were completed within 12 months, BPFI said. That compared with a 40 per cent completion rate in 2018, and no lower than 20 per cent in the years since.
Overall, BPFI point to the continued drop-off in employment for trades and other skills vital for housing. Housing construction employs about 50,000 fewer people now than in 2007 at the peak of the Celtic Tiger.
“The most recent apprenticeship registration numbers and demand analysis shows that there are still significant labour supply gaps in some of the skilled trades, especially plastering and tiling, painting and decorating and plumbing,” Mr Hayes said.
Underlining the problems in the sector, Mr Hayes noted that the total for commencements in 2024 may have been artificially boosted by a rush to avoid the expiry of waivers on development levy and water connection charges.
If half of those commencements were driven by the levies expiring, then the “real” figure for new starts would have been about 18,000. That would be “lower than the commencement activity in the same period in 2020 during the pandemic,” he added.
Still, demand from buyers would appear to keep rising, according to the BPFI’s own mortgage data.
Mortgage drawdown volumes increased by 10 per cent in the 12 months to the end of September, while the value of drawn-down home loans surged 18 per cent compared with a year earlier.
