CIF Director-General Tom Parlon on the CSO Housing Figures

Tom Parlon has commented on the CSO Housing figures saying the Irish Construction Industry will have to grow by 9% on average annually up to 2020 for to meet housing demand, and he has identified underinvestment, lack of finance and the skills shortage as problems in delivering targets.

The Government’s Housing Action Plan is targeting a residential building rate of 25,000 units per annum. The Department of Housing, Planning, Community and Local Government put the official number of housing completions for 2016 at 14,900 units, however, the ESB connections data has been criticised as a reliable source for calculating the number of new builds, which may be substantially lower.

In a CIF statement, Director-General Tom Parlon identified the underinvestment and lack of finance as problems in delivering housing, saying: “The current housing shortage is the result of a decade of underinvestment in the housebuilding sector compounded by an infrastructure deficit and a market failure in finance for homebuilders.  Currently housebuilding, outside Dublin and Cork, cannot attract finance at viable rates so activity is and will continue to be permanently depressed.   If house-building only occurs in urban areas over the next decade this will fundamentally unbalance the country further; Dublin will continue to congest and regional economies will be undermined.”

A recent Independent article described an internal report stated that Irish banks may be unwilling to lend enough to developers to help solve the housing crisis if the economy grows as predicted. Finance is also a major topic of concern for main and specialist contractors.

Tom said, “The industry will have to grow by 9% on average per year up to 2020 to meet demand.  This is a huge opportunity to develop a sustainable construction industry by putting in place a long-term growth strategy similar to those established with the food and financial services industries. The price of inaction on this is a continuing housing and homelessness crisis, the decline of rural Ireland and a congested capital, choking under the weight of producing almost 50% of Irish GDP.”

Tom has also identified the skills shortage as a problem. The recent CIF commissioned DKM report found that the Irish Construction Industry will require 112,000 additional workers up to 2020 to deliver the Government’s housing and infrastructure targets. This is a topic which Irish building magazine has covered in Issue 4 of 2016 and Issue 1 of 2017.

There has been scepticism about the Census 2016 housing data and housing statistics, with analysts saying the figures are inaccurate, and that the actual figures for 2016 completions are lower than the ESB’s data indicates. Minister Simon Coveney has stated: “Connections of electricity services by the ESB have long been used by my Department (and indeed many other housing analysts) as a reliable proxy for housing completions going back to the 1970s. As I understand it, the ESB dataset is the only longitudinal comparator that gives full coverage of the data.

However, the ESB connections data has been criticised by some commentators and parts of the media as inaccurate and for overstating new builds. However, the premise for using it is quite simple. Only when a house is finished and ready for occupation is the electricity ‘switched on’.” Minister Coveney went on to say that the Department has asked the ESB for additional data to help isolate issues in the dataset and he outlined the other sources of data on housing used by his Department.

The forthcoming issue of Irish building magazine we will cover housing and finance in construction.

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