Employment in the construction sector will need to increase by 80,000 people just to meet current demand, a report from business lobby group Ibec suggests.
And the number would have to increase to around 110,000 if the required 36,000 housing units a year are to be built.
This would mean that numbers working in the construction sector would roughly have to double. According to Census 2016, 124,000 workers describe their primary industry as the construction sector, with 18 per cent of those unemployed.
Ibec’s report highlights that a “properly functioning housing market is needed in order to underpin national competitiveness, improve quality of life, and to address the plight of people experiencing homelessness”. It makes a series of recommendations and calls on government to do more to reduce the cost of development land and be more ambitious in its approach to direct building.
At an event launching the report, David Duffy, the director of Property Industry Ireland, noted that increasing construction employment levels was one of the key challenges in increasing Ireland's housing supply.
“The overall recovery in the economy, we’ve seen employment levels go back to where they were, but construction employment levels haven’t returned to where they were. Not only do we need to build a significantly higher number of new homes, but we also have the national development plan coming as well as private sector investment, so there are a huge number of draws on capacity in the sector.”
Dysfunctional market
The report –Better Housing: Improving Affordability and Supply – points out that a dysfunctional housing market is damaging the quality of life of "many people and undermining Ireland's economic prospects".
Ivan Gaine, head of new homes at Sherry Fitzgerald, told the event that some government initiatives were working. He instanced the help-to-buy scheme, which helps first time buyers with a deposit to buy or build a new house of apartment.
Mr Gaine said 80 per cent of what Sherry Fitzgerald has transacted is under €500,000, indicating the scheme was working. However, he is concerned that if the scheme is withdrawn in 2019, as planned, “that’s going to rock the boat”.
Aside from property purchases, the event was also told that urgent reform is required to ensure a sustainable rental market for landlords and tenants.
“We must balance improved protection for tenants with the need to ensure an adequate supply of rental properties. The proposed deposit protection scheme should be implemented as quickly as possible and long-term leases should be supported through the removal of stamp duty on rental agreements,” Ibec suggested.
Danny McCoy, Ibec chief executive, said that “the scale of housing flow now is at real crisis level”.
Retain talent
“Ireland’s ability to attract and retain talent as part of our inward investment strategy is being eroded by a range of problems that are damaging the quality of life of our people including housing shortages, access to essential services and traffic congestion.
“These problems are feeding into the workplace in the form of higher wage demands, rising commercial rents and pressure on maintaining productivity. Ireland needs to fix these problems or risk developing systemic economic uncompetitiveness and losing talented people.”
The launch of Ibec’s report on housing coincides with its new national campaign which will see it increase its lobbying activity on policies in areas including infrastructure, planning sustainability and housing.
The campaign is in response to, aside from housing, insufficient public infrastructure, a planning system that is unfit for purpose and long term environmental sustainability challenges, it says.
