Thursday 22 August 2019

Home Truths: Shortages of skilled workers drove construction costs up 20pc in 9 months alone last year

The big view on Ireland's property market

Site slowdown: Housing projects are increasingly losing construction workers to bigger commerical schemes
Site slowdown: Housing projects are increasingly losing construction workers to bigger commerical schemes
Mark Keenan

Mark Keenan

My generation cut its reading teeth with Ladybird's much loved library of board backed little picture books. There must have been thousands of them. In our house we certainly had dozens.

We were as enthralled by the vivid and magical illustrations by artists like Martin Aitchison, Harry Wingfield and C F Tunnicliffe, as by the stories; usually fairytale classics like Red Riding Hood and the Three Little Pigs.

We started with the Ladybird Nursery Rhyme series, some illustrated by Frank Hampson (better known as the creator and illustrator of Dan Dare). Any mention today of Gloucester still has me picturing Hampson's comically horrified Dr Foster up to his middle in a puddle with a steady stream of rainwater channelling down from his crooked stove pipe hat.

Most of those illustrations, like his hot air balloonist take on The Man in the Moon (who came down too soon), or his This Little Piggy... (a pig on a Vespa) were an unorthodox marriage of chocolate box English Edwardian and 1960s acid trip.

But some of those early reading nursery rhyme verses go back almost a 1,000 years and have darker origins. Most know for example, that Ring a Rosey likely originated from the Black Plague.

But did you know Humpty Dumpty was most likely a enormous cannon deployed by the Royalists in the English Civil War? Humpty met its end at the Siege of Colchester. The Royalists mounted it in the tower of St Mary-at-the-Wall Church where it did much damage to the assailing Roundhead forces until an opposing shot split the tower wall and caused it to fall to the ground. Needless to say it couldn't be put "together again" by the King's forces. Lewis Carroll first depicted Humpty as the anthropomorphic egg we've since become familiar with - in Alice Through the Looking Glass.

There's sectarianism - some sources trace Three Blind Mice to a coded chant concerning the Catholic Queen Mary's dreadful treatment of three Protestant Bishops she had burned at the stake. Their 'blindness' being their faith. On the opposite side of the religious divide, Ladybird Fly Away Home (your house is on fire etc), is thought in some quarters to have started as a 16th century warning chant to English Papists - "ladybird" being a taunt levelled at Catholics who revered the Virgin Mary.

Among the very oldest of verses, is For Want of a Nail, the earliest version of which can be traced back to Germany in the early 13th century. For those not familiar, it's not so much a rhyme, as a life's lesson in why the little things and the details are ultimately important.

It's origins are lost in time but the advice it delivers is sterling: "For want of a nail the shoe was lost. For want of a shoe the horse was lost. For want of a horse the rider was lost. For want of a rider the message was lost. For want of a message the battle was lost. For want of a battle the kingdom was lost. And all for the want of a horseshoe nail."

Today the battle to solve the housing crisis is being jeopardised; not so much for the want of a nail, but for want of those who hammer them in. This week we learned of all sorts of skills shortages currently emerging in Ireland, among them a sudden shortage of both barbers (I'm not concerned there) and of chefs (I'm more concerned here).

But a more ominous shrinkage in construction labour and skills availability that started to kick in early last year had really made its presence felt by the end of 2018.

It was estimated that shortages of skilled workers drove construction costs up 20pc from January to September alone last year. Carpentry costs alone (hammerers of nails) rose by 70pc in nine months. Brick layers increased their charges from €1.10 a brick to €1.40 in the same period.

It has caused the CIF's construction chiefs to plea for more apprenticeships, citing the need for 300 per year with around 100 taking up positions. The shortage of building personnel of all sorts first appeared in earnest on the estate agent's radars in the second half of last year.

Agents in some parts of Dublin noticed that buyers who had acquired project houses at the start of the year, were coming back to sell them again even before the year was out.

Against a background of surging building labour costs due to labour shortages, they had either (a) themselves underestimated severely the cost of doing these houses up or (b) they had actually gotten quotes from builders before buying only for those builders to renege afterwards. The new costings were too expensive to make sense and so they brought the house straight back to market. This year the CIF said 89pc of firms are struggling to recruit.

There are problems resulting on a number of fronts. First, the plum jobs for builders tend to be in commercial constructions of hotels and offices, not in housebuilding. So those housing schemes which are underway or about to get underway are struggling to get crews. Secondly, estate agents are now struggling with vendors who are unrealistic about the value of second hand homes in need of work.

An agent I talked to this week said there were too many "pigs with lipstick" out there, adding that executor sales posed the worst problem. "If you have four siblings as the beneficiaries, all four need to be convinced of a price cut and there's always one who is unrealistic."

His message to vendors is: "You need to factor in what the new owners will have to spend. The true value therefore is that of the same home in good condition and then minus the cost of the work. And that cost has been going up and up."

By his estimation, bigger Dublin homes in need of a thorough upgrade now need to come down in price by between 5pc and 10pc to make them a sale prospect.

But there might be worse to come. Much of our construction materials and especially bricks, come from the UK where some builders have been stockpiling.

Failure to address the labour crisis alongside Brexit induced materials shortages could see the undoing of efforts to solve the housing crises; for want a nail, a brick, a carpenter, a plumber...

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