Only half the homes needed this year will be built, construction event told

Conference hears of ‘real concerns’ for 2021 and 2022

Construction industry has shrunk by 20 per cent to 25 per cent as a result of the pandemic.

Construction industry has shrunk by 20 per cent to 25 per cent as a result of the pandemic.

 

Just half the number of new houses needed in the Republic this year will be built as Covid-19 takes its toll on construction.

The Government agrees that between 16,000 and 18,000 new homes will be built in the Republic this year, the Minister for Housing, Darragh O’Brien TD, told the Construction Industry Federation annual conference on Thursday.

“That is around half what the State needs per annum,” he told the industry gathering, held this year by video link.

Estimates from the Central Bank and Economic and Social Research Institute agree that the Republic needs to build more than 30,000 new homes a year to meet the needs of its growing population.

Mr O’Brien made his remarks following predictions from Annette Hughes, an expert on the sector, that construction is unlikely to begin recovering from the impact of Covid-19 until 2023.

Ms Hughes, director of EY-DKM Economic Advisory Services, estimated that the pandemic had cost the sector around 20,000 jobs.

“The real concern now is the prospects for the industry in 2021 and 2022,” she said.

She added that it could be “2023 or beyond” before the industry began to get back to 2019 levels.

Ms Hughes told the conference that construction had performed better than expected after severe lockdown measures were lifted in May, but still shrank by 20 per cent to 25 per cent.

Most building sites in the Republic shut at the end of March then the Government stepped up its initial lockdown in a bid to contain the virus.

They reopened in May with extra measures that included requiring workers to wear masks and maintain social distancing where possible.

In his address, Mr O’Brien stressed that the Government remained committed to building more social housing.

He calculated that around one quarter of the dwellings built since 2013 were social or affordable homes.

“And we will also bring forward proposals regarding affordability allowing more people to buy homes,” he added.

Social housing

Earlier, three out of four panellists discussing construction’s post-Covid prospects agreed that the Government should prioritise social housing.

Marian Finnegan, managing director residential, with property company, Sherry Fitzgerald, Donal McCarthy, chief operations officer with builder John Sisk & Co, and Professor Niamh Moore-Cherry of University College Dublin, all highlighted the need for more social housing.

However, Stephen McCarthy, managing director of Astra Construction Services, argued that the shared equity scheme provided a better solution to the Republic’s housing crisis.

Mr McCarthy said the scheme cost the State €50,000 per home, while the Government collected €115,000 in levies from each one that is built.

“So for €50,000 they get €115,000 and then they get the €50,000 back when the person sells the home,” he pointed out.

Opening the conference, Taoiseach Micheál Martin, warned that all organisations doing business with the UK face Brexit customs disruption from January.

Mr Martin said that there would be substantial challenges to supply chains from the UK from January 1st, irrespective of the outcome of trade talks in Brussels.

The Taoiseach noted that the Government had made €20 million available to businesses to help them deal with new customs arrangements and documents.