| 12.4°C Dublin

Close

Premium


The two-step solution to our housing crisis – cut costs and build more, simple as that

Sean Barrett


Close

The National Children's Hospital building site in Dublin. Photo: Gareth Chaney Collins

The National Children's Hospital building site in Dublin. Photo: Gareth Chaney Collins

Reform: The construction industry in Ireland has to be upgraded from its role as a low productivity supplier to a bloated public capital programme towards building houses that we can afford

Reform: The construction industry in Ireland has to be upgraded from its role as a low productivity supplier to a bloated public capital programme towards building houses that we can afford

/

The National Children's Hospital building site in Dublin. Photo: Gareth Chaney Collins

In February last year the Statista Agency of Hamburg, Germany, found that housing in Dublin was the second most expensive in the EU – after Paris. On March 15 this year, the Society of Chartered Surveyors estimated that house rebuilding costs here have increased by an average of 7.3 pc over the last 18 months. There have been concerns from the Central Bank and the Economic and Social Research Institute that schemes to tackle Ireland’s high house prices by assisting buyers will further increase prices. The case made here is that Ireland’s high house prices are caused by supply factors. If these are tackled, there will be substantial gains to those facing difficulties with high housing costs now, and to the overall competit iveness of the Irish economy.

The first cause of high house prices in Ireland is the low productivity of the construction industry. The Build report of 2019 found there has been minimal productivity growth in Irish construction from 2000 to 2016. Labour productivity in the Irish construction sector is ranked at 14 out of 19 Euro area countries and is 24pc below the average. By contrast, Irish productivity across all sectors is 34pc above average. That gives the other sectors a much better output and price performance than the construction sector. The Build report estimated that, had Irish construction costs kept pace with other domestically dominated sectors, its gross output would have been €3.1bn higher.


Most Watched





Privacy