The surge in housebuilding of the past decade has finally peaked and this year will see a reduction in the number of units completed, the Construction Industry Federation predicted yesterday.

In its annual review of the industry, the CIF said an estimated 78,000 houses were built in 2004, the highest number to date and almost 10,000 more than were completed the previous year.

After years of rapid expansion, however, a slight decline in the number of new houses, to 73,500, is predicted this year.

That figure will gradually decline over the coming years to a "more sustainable level of output" of about 55,000 to 60,000 houses per annum, the federation said.

Its director of housing, Mr Hubert Fitzpatrick, said the increase in house prices had moderated last year and this reflected the fact that supply and demand were "broadly coming into equilibrium".

Even the reduced rate of new houses, he pointed out, was well ahead of that in other European countries and the United States.

"Ireland is now producing houses at the rate of 20 units per 1,000 of population. This compares with the European and US average of five units per 1,000 of population.

"A third of Ireland's housing stock is now less than 10 years old and we are adding to our housing stock at twice the rate of increase of the population."

Asked about progress in providing the 10,000 affordable houses promised by the Government under Sustaining Progress, Mr Fitzpatrick said builders were anxious to get the project completed "at the earliest possible date".

Lands had been identified by the Government and a number of houses would be built under the scheme this year, he said.

Mr Don O'Sullivan, director of main contracting, criticised the "dismal failure" of the State to deliver in the area of waste infrastructure.

Landfill costs in Ireland were now more than three times those in most other European countries, he said, resulting in "excessively high" domestic bin charges and waste disposal costs.

"These high charges are impacting directly on Ireland's competitiveness and are now a serious deterrent to inward investment and to growth of indigenous business," he said.

The difficulty would not be resolved until adequate waste recycling and disposal facilities were put in place throughout the State, including incinerators, residual landfills and material recovery facilities.

"The failure of the State's approach to solid waste management is illustrated by the fact that not one single new waste disposal facility has been commissioned anywhere in the State since 1999."