Development shutdown will result in housing scarcity lasting years, builders say

0
100

The supply of new homes could be reduced by up to 8,000 this year due to the current construction interruption Irish Home Builders Association (IHBA) warned.

Construction sites across the state had to close earlier this month as new Covid-19 restrictions went into effect on all but essential construction projects.

IHBA director James Benson said the hiatus would likely exacerbate the state’s housing crisis. A survey of members showed that work on more than 16,000 apartments in 273 locations had been suspended due to the restrictions.

Given the measures that are expected to remain in effect through March 5, that should reduce supply by around 8,000 units this year, “and that assumes there are no further restrictions,” Benson said.

In its most recent bulletin, the Central bank New home completions were expected to be on the order of 18,500 in 2020 and between 21,500 and 23,500 in 2021 and 2022, respectively. That is 23,000 fewer than predicted before the pandemic.

“We fully appreciate the gravity of the current situation and the burden on the healthcare system, but everyone agrees that we continue to live with a housing crisis,” said Benson.

“We will have a significant impact on housing delivery in 2021 and through 2022 and beyond,” he said.

Effects on striking

Aside from reducing overall supply, Benson said the current stage would also have an impact on jobs, finances and investments.

Some companies have already been forced to lay off workers temporarily or permanently, he said.

“These people need to find alternative employment in the short term if they can, and some may not return to their original employment. So we could escalate the existing shortage of skilled workers, ”he said.

Mr Benson also said the financing costs associated with the construction would continue to rise even if the building stalled.

And he said investments could suffer too, as they rely on a level of security that the current “stop-start” market cannot provide.

As of January 8, all non-essential construction sites had to be closed with the exception of social housing and some almost entirely private houses to contain the spread of the virus.

A survey of IHBA members carried out over the past few days found that work on 16,375 apartments in 273 active projects has stalled as a result.

While work on 883 public housing and 461 private homes continues near completion, that is just 7.6 percent of the homes under development at the time the current restrictions went into effect on Jan. 8.

Companies today

Get the latest business news and commentsSIGN UP HERE