Building prices overtake boom-era highs

Building costs are rising at their fastest pace in two decades as energy and materials come under increased pressure, a new report warns.

Construction price inflation rose 7.5 per cent in the first six months of 2022, according to figures from the Society of Chartered Surveyors of Ireland.

The organisation says this is the highest six-month increase recorded since it began tracking costs in 1998.

The figure overtakes the 7.4 per cent recorded in the second half of 2000, when the Republic’s wealth was growing at historically high rates.

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Combining the new record with the almost as steep rise in costs over the second half of last year brought the annual rate at the end of June to 14 per cent and to a record 22 per cent over 18 months.

Surveyors say there was little variation across the Republic, with prices rising at 7 per cent in Dublin and 8 per cent outside the capital, in the first half of the year.

The society based its figures on responses from chartered surveyors working on commercial building projects around the State in June.

Kevin Brady, chairman of the society’s quantity surveying professional group, blamed the war in Ukraine for this year’s rapidly rising costs. “These are significant increases and their continuous nature is adding tremendous pressure on the sector in terms of viability for projects,” he said.

Mr Brady explained that before the Ukraine conflict, the industry expected prices to stabilise this year following a post-pandemic surge in 2021.

Insulation, plasterboard and sanitary ware (bathroom and toilet fittings) are increasing fastest. However, the society noted that prices for some steel and timber products were levelling off.

Society president Kevin James predicted further increases through the second half of the year, but warned that the record inflation rate demanded urgent Government action.

He said the group believed Government should cut planning delays and timing to help reduce risks and costs.