According to consulting firm EY, the government will not be able to meet its housing goals in 2023 and 2024.
Home completion is expected to exceed this year’s target by 400 units, and EY reports predict a shortage of 2,000 units in 2023 and 1,450 units in 2024.
All government housing plans are targeted for completion of 24,600 in 2022, 29,000 in 2023 and 33,450 in 2024.
But rising costs, delays in planning, land issues, and competition from building apartments are all affecting the delivery of new homes, a report from Euroconstruct’s EY Economic Advisory Board said.
Annette Hughes, director of EY Economic Advisory, said the “lack of services and other infrastructure” prevented planning permits from being converted to completion.
According to the Central Statistics Office (CSO), a total of 42,991 units were granted building permits last year, 60 of which were apartments.
According to a recent survey by the Urban Land Institute, the demand for the number of suburban apartments under construction is not sufficient, and young buyers prefer urban apartments and duplex housing.
The news came as construction activity slowed again in May, putting metal, fuel and subcontractor costs on the company.
According to BNP Paribas Real Estate Ireland, rising prices are damaging customer demand and corporate confidence, with three in four reporting rising costs this month.
BNP’s total construction activity index was 51.5 in May, down from 52.5 in April. Anything above 50 indicates an increase in activity.
Housing activity grew stronger than the rest of the sector, with an index of 56.6, while commercial activity slowed to 52.2 and civil engineering decreased. New orders also declined for the second straight month, but business sentiment was at its lowest level since October 2020.
“Cost pressure” was the main reason for the slowdown, as survey respondents said customers were postponing projects until prices began to fall.
According to companies, copper, fuel and oil prices have risen the most, and subcontractor prices have risen at record highs.
According to EY’s report, construction price inflation is expected to average 10% in 2022, 6% in 2023, and drop to 4% in 2024.
Despite rising prices, the report predicts that construction output will increase by 4.9 percent in 2022, 4.1 percent in 2023 and 5.4 percent in 2024.
According to BNP Paribas, job creation in the construction sector surged in May, the fastest pace since January, and purchasing activity has risen.
John McCartney, director and chief investigator of BNP Paris Bus Real Estate Ireland, said the war in Ukraine and the Covid regulation in China have led to higher costs, but “the big picture remains largely positive. There is. “
“Construction activity continued to expand last month, especially in the housing sector, and construction companies remain very bright about the future,” he said.
“Looking at the data as a whole, it seems that construction companies were able to pass on some of the higher input costs to consumers, and I’m confident that this can continue.”