Builders are busy – and benefit of this can't be underestimated
Published 11/07/2014 | 02:30
THE rise in house extensions is driven in part by negative equity, tracker mortgages, rising prices and competitive construction costs.
Equally, people are living longer and that means house occupancy is going on for longer than it traditionally would, which has a 'locking out' effect on many new entrants.
Material prices have not dropped significantly; in the last year alone timber prices have risen several times and reinforced steel joist (often used to hold up load-bearing walls at the back of homes when extensions are directed that way) prices as well as cement and block prices are broadly static.
The market statistics are also going to need time for any strong inference to be taken from the data because other non-economic things such as new building codes that came in at the end of the first quarter in 2014 drove up activity levels in commencements that were brought forward to avoid more strenuous oversight (and ensuing costs) the new rules create.
In this context, the spend of €115m is only 0.1pc of the value of the mortgage market, only every second house has a mortgage, which means in total context this figure is virtually immaterial and statistically insignificant.
What isn't insignificant is that the increased activity does lead to more jobs, and on a personal level many builders I speak to about market conditions are giving me longer lead times for starting work than in the past, a sign they are busy.
The benefit to the State of construction cannot be underestimated; a recent political question indicated that up to 90,000 construction workers were unemployed, new build brings them back to labour.
It won't happen quickly enough for anybody to be happy – not the Exchequer, the first-time buyers facing rising prices or the State, who are desperate for the uplift in income it will bring.