The outlook for new home building in Ireland has improved compared with last year with fewer developers concerned about Brexit, new research shows.
But there are worries about a shortage of skilled labour which developers say is hampering projects and about labour costs with some reporting these have increased by 30% in the last three years.
Overall, the 2018 new construction survey from real estate firm Knight Frank shows that developer activity expanded for the third successive year in 2017 and is expected to strengthen further for 80% of developers in 2018.
The report says that the increase in sentiment has been driven largely by the growth in house prices. In ranking the biggest obstacles to construction, low residential prices have fallen from first position in last year’s report to fifth this year.
The survey reveals a more positive sentiment behind Brexit. Driven by the continued resilience of domestic economic growth coupled with high-profile office relocation announcements, 44% now believe Brexit will boost new homes construction activity, double the number of last year’s report.
Prices have now risen to a level that makes construction viable again, shifting the focus to other factors, according to James Meagher, director of new homes and development land at Knight Frank.
‘With the lack of suitable sites now ranked as the largest obstacle to construction, the religious orders may have a significant role to play with recent estimates suggesting that they have 30 sites with the potential to deliver 6,500 homes on their lands,’ he pointed out.
‘With the high cost of construction cited as another major obstacle, policy changes to the car parking requirements along key transport nodes will remove a major cost for developers in the delivery of apartments. Similarly, three quarters of survey respondents believe that relaxing height restrictions will also help increase the viability of apartment delivery,’ he added.
