CIF predicts record post-crash housing output next year as costs ‘stabilise’

Next year could see the biggest buildout of new homes in Ireland since the Celtic Tiger era, the Construction Industry Federation (CIF) has said.

Director of housing and planning Conor O’Connell said 2024 should be “a good year for housing output” provided the additional resources earmarked for An Bord Pleanála speeds up decision-making at the planning level.

Speaking at a conference hosted by Build Europe, an umbrella organisation for EU-based residential developers and constructors, in Dublin, Mr O’Connell noted that the cost of construction in Ireland had “stabilised” since the worst point of the energy-price shock.

He said Input costs had also been reduced by the Government’s decision earlier this year to cut development levies. “As a result 2024 could see a significant increase in housing supply if the decisions come through from An Bord Pleanála.”

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However, he declined to say if output next year would be in line with or exceed the Government’s Housing for All target for 2024, which is for 33,450 units. Housing output exceeded the Government’s target last year, hitting almost 30,000 and the figure is expected to be similar this year.

Mr O’Connell said there were tens of thousands of housing units caught up in planning disputes that could be unlocked with the additional resources being put into An Bord Pleanála. He also noted that the State-backed Land Development Agency (LDA) and Approved Housing Bodies (AHBs) such as Respond had a significant number of apartments projects earmarked or already on their books. “That kind of collaborative approach will yield an increase in housing supply next year once the decision-making time frames are improved,” he said.

The positive outlook for residential construction in Ireland contrasted with most of the rest of Europe. Delegates from countries including Germany, Belgium and the Netherlands said high costs linked to higher interest rates had triggered downturns in output despite the ongoing demand for housing.

Andreas Ibel, Build Europe president, said high material costs in the past had been masked by low interest rates but after 10 consecutive rate hikes by the European Central Bank this was no longer the case.

“We don’t see prices going down because costs are so high,” he said, noting housing affordability across Europe remained “a big problem”.

“Low interest rates covered these rising costs for a few years,” he said. “Now with normal interest rates, the cost of materials going up, the shortage of workers, rising salaries – all this does not fit together any more.”

Mr Ibel said governments needed to reduced the cost of building by reducing taxes such as VAT.