The Government faces steep hurdles from a construction skills shortage and rising prices for building materials after setting aside a record €5.5 billion for housing in the budget, industry participants have warned.
Minister for Housing Darragh O’Brien has said the budget measures “will ensure” the Government can meet ambitious targets to boost the construction of new homes and settle the housing crisis that is its greatest policy challenge after the pandemic.
But people involved in priority social housing projects and private developments warned of increasing strain in the sector as public investment ramps up in a bid to assert control over a surging rents and purchase prices.
“The acute stresses and strains at the moment would relate to supply of skilled labour [wet trades etc] and also material-price increases,” said one local authority chief after the Government set out plans to build 9,000 new social homes next year. Wet trades include plastering and bricklaying.
Such remarks follow data showing that the annual rate of inflation for construction tender prices reached 8.3 per cent in the 12 months to June, almost double pre-Covid levels. The Society of Chartered Surveyors Ireland reported “exceptional increases” in the cost of steel, timber and insulation products, citing supply chain issues and intense international competition for materials.
The local authority chief added: “Judicial reviews of strategic housing developments are also causing a delay in the delivery of housing at the present time.”
The Minister’s budget plan includes €4 billion for capital investment in new homes next year, €634 million greater than in 2021. The package comprises €2.6 billion from the exchequer and a further €1.5 billion from the Land Development Agency and the Housing Finance Agency. The budget includes a further €1.4 billion for day-to-day current spending on housing supports.
In addition to building new social homes, the Government aims to buy 200 units for social housing tenants and lease another 2,620 for tenants.
After disruption to building work during coronavirus lockdowns, the industry now suffers from growing shortage of skilled labour after the resumption of delayed project and the commencement of new developments.
The crunch is not confined to trades and extends to building professions, said Barry Kelly, director of specialist construction recruiter ICDS Group. He has in excess of 100 vacancies for quantity surveyors, project managers, estimators, bid mangers architectural role and structural design.
“Salaries are increasing but the skillset isn’t . . . The industry and the country need to bring people in from overseas, Europeans and non-Europeans,” said Mr Kelly.
“That will do two things in my opinion: It will increase the skillset because there are countries around the world that have built millions of more houses than we will ever build and taller building than we’ll ever see. This also may help level off the false inflationary salary rise.”
James Benson, director of the Irish House Builders Association, which represents hundreds of companies, said the skill shortage was evident at “all levels” of the sector,
“The committed funding is vital for both investment and attracting skilled labour but to realise the ambitions of [the Government’s] Housing for All [plan] we need to see greater efficiencies in the system; and that’s zoning, infrastructure and planning,” he said.
“We need to ensure through the formation of county development plans that enough serviced zoned land, the raw material, will be available for housing delivery. On infrastructure, we’ve seen a deficit in investment in the last 10 years that has led to some of our utility providers inheriting legacy issues and their resource and funding constraints which have led to delays in the occupation of new homes.”