AnnualDinner:Despite signs that the residential market may be softening, the Society of Chartered Surveyors, at its recent annual dinner, still predicted a busy future for the construction industry.
The construction sector remains strong and growth in the non-residential area should help to offset any slide in the number of housing units being built, said Conor Hogan, president of the Society of Chartered Surveyors, at the society's annual dinner recently.
Hogan also argued that Dublin city should go for high density and high-rise, in keeping with the new draft local area plans for Ballsbridge. This approach should become a "blueprint" for all areas of the city, he said.
In a wide ranging address, Hogan told the 1,500 delegates present that independent surveys demonstrated the strength of the construction sector.
He cited the findings from the SCS/IPD Irish Property Index and the Bank of Scotland/Dublin Institute of Technology property poll. While there was softening of the housing market, the non-residential construction sector, which accounts for more than 33 per cent of building output, remained buoyant. "These surveys are proof positive of the healthy state of the property market and, by extension, the construction industry," said Hogan. He criticised the "gloomy" forecasts of some commentators.
Hogan, a director of Joseph C Hogan & Sons Quantity Surveyors, pointed to the National Development Plan 2006-2013 as a positive sign of things to come. The strength of the commercial sector "coupled with the significant investment proposed by the national development plan will more than take up any forecast reduction in the number of dwelling units being built", he said. Reliance on the figure of dwelling units being built was also flawed, he said, given the huge increase in units built between 2000 and 2006, which showed an increase of 43,000.
-"I am not surprised that some reduction may occur. Although this reduction has been forecast each year for the last three years, it is yet to happen."
Hogan also called on Dublin City Council to go for high density and high-rise, in line with plans for the Ballsbridge area, where developments are expected to rise to 10 storeys.
"As a nation, city and society, we need to adopt a radically different approach to the welcome growth pressures that Dublin continues to experience if we are serious about sustainability, reduction of CO2 emissions, reduced commuting times and a better quality of life."
He referred to the recently published SCS Housing Study prepared by Dr Brendan Williams of UCD, which highlighted Dublin's continuing sprawl into adjoining counties, with Hogan arguing that this couldn't go on.
A "bold vision" was needed regarding density, something that had resulted in "mediocre urban design elsewhere", he said. "The opportunity now exists in Ballsbridge and other suitable locations," he added.
Hogan's address also dealt with the controversial issue of cost over-runs on construction projects and the Government's new contracts, which come into effect on February 19th. There was a significant difference between construction cost inflation and project inflation, he said. Construction costs were not out of control, it was project costs that were causing the over-runs, he maintained.
Project inflation was driven by "add-ons" and variations made to a project following agreement. This pushed up the final cost of projects. Construction cost inflation was lower than the cumulative consumer price index rises in the past six years. The society's tender price index rose by just under 20 per cent compared to the CPI, which over the same six-year period rose by 21.7 per cent.
Hogan rejected the ESRI's view that State spending in the sector increased the risk of overheating in construction.
"The Irish construction industry is, I believe, well able to deal with this additional work and has proven its ability to be innovative and competitive."
