AROUND 5,000 new homes worth more than €1.25bn and accounting for almost half of all planned output for next year face being scrapped.
The construction industry has expressed fears over the Central Bank's new loan-to-value (LTV) and loan-to-income (LTI) requirements. Strict new mortgage lending measures will play havoc with building at both ends - first by eliminating a huge tranche of buyers and second, by causing banks and private financiers to withdraw promised capital and finance for big schemes.
One source added: "In most cases, those schemes which have gone ahead have only just got funding by the skin of their teeth."
The source said that if the measures went ahead "almost all" multi-unit schemes currently being planned would be postponed or curtailed altogether. Multi-unit schemes are likely to make up around half of the 10,000 or so homes planned for next year.
The claims follow the lodging of a new report warning of the unexpected impacts of the new mortgage control measures. Compiled by Grant Thornton, and funded by the Construction Industry Federation, it has been submitted to the Central Bank this week.
It lists "cessation/non commencement of construction" as one of the "unintended consequences" of the new measures.
A spokesman for the Construction Industry Federation (CIF) said: "In a lot of cases our members have said that they are planning to put residential projects on hold if these measures are introduced."
First time buyers in Dublin will now have to save an average of €70,000 to buy a €350,000 home and most builders and their financiers believe this is too big an ask for young couples.
It has already been estimated that 40pc of the home loans paid out in 2014 would not have transacted at all under the Central Bank's new rules.
The report estimates that saving for a deposit and paying rent for a home at the same time in Dublin means a couple will have to set by €2,575 per month.
"Across the construction sector there is likely to be a cessation in on-going construction programmes and a reduction in the numbers of commencements, as a consequence of the proposed policies.
"Such policies will both reduce the commercial viability of many projects and increase the likelihood that working capital support from institutions may not be available," the report says.
Other effects include:
• A knock-back to employment caused by the resulting loss of work to those directly involved in the sector as well as "knock-on" jobs like solicitors and surveyors.
• The exclusion of "credit-worthy" candidates from home purchase on the basis that first time buyers tend to be in the early stage of their careers and the most likely to increase their incomes going forward.
• An increase in unsecured and "risky" credit used to beat the mortgage cap - the report says it happened in Sweden when "hard LTV's" were introduced.
• Increasing rents, as forced-out buyers turn to letting in a market where supply is already restricted.
• A negative impact on Foreign Direct Investment as rents increase. This will also lead to a further, increased demand for social housing.
The report describes the proposed Central Bank measures as "a blunt tool" usually employed to deal with an overheating market, whereas most of Ireland's market (outside of Dublin) is clearly not overheating.
It is critical of some of the factors which currently cause Ireland to have some of the highest-priced housing in Europe - most notably it criticises the high cost of local authority levies and taxations to home construction.
Finally, it asserts that measures outlined for Budget 2015 are "unlikely to address the fundamental issues that are hampering supply."