Ireland

Overall construction activity

Gross Fixed Capital Formation (GFCF) in building and construction is forecast to reach over €28 billion in value terms in 2019. 2019 brought overall growth estimated at 10% in volume terms for building and construction. The seasonally adjusted figure for construction employment now stands at 148,300 persons at the end Q4 2019. The impact of near full employment has led to a tightened labour market and increased competition for skilled labour in the construction sector, as well as other key sectors of the economy. Direct construction employment grew by 2.1% to 148,300 persons in the year to the end of Q4 2019. 2019’s growth continued to be driven by the private residential and to a lesser extent by non-residential sectors.

Housebuilding

The total number of new dwellings completed in 2019 was 21,241, up 18% from 17,952 built in 2018. The biggest relative growth can be seen for new apartments. For the whole of 2019, the number of apartments completed increased from 2,283 in 2018 to 3,644, an increase of 59.6%. Forward looking data in the form of new starts totalled 26,237 units in 2019, up 16% from 22,467 starts in 2018. The ‘Project Ireland 2040’ National Policy Objective 32 targets the delivery of 550,000 additional households to 2040. For2020, €1.5 billion were foreseen to focus on delivery of 8,500 new social homes through build and acquisition programmes, while €126 million should be allocated to the ‘Serviced Sites Fund’ to provide infrastructure to deliver 6,200 new affordable homes over the life of the Fund. The ‘Help to Buy’ (HTB) scheme, an income tax incentive, has been extended in its present format until 31 December 2021. Annual housing completions in December 2019 (+18.3% at 21,241 units) were still approximately 40% below the demand estimate of 35,000 units per annum. The macro-prudential mortgage lending rules have impacted severely on affordability and may also have contributed to the slowdown in overall house price growth and housebuilding in 2019.