Housing construction activity rose sharply in first four months of 2024 but delivery may require increased labour capacity – BPFI Housing Market Monitor
- Over 30,000 housing units commenced in first four months of 2024 compared with 32,800 units in all of 2023
- Decline of 12.1% in housing completions compared with same period in 2023, mainly driven by fall in apartment completions
- 42% of commencements in first four months of 2024 for apartments, indicating potential longer lag between overall commencements and completions
Friday 21st June 2024 – The latest Housing Market Monitor Q1 2024, published today by Banking & Payments Federation Ireland (BPFI), shows that housing commencements rose sharply to over 30,000 (30,138) units in the first four months of 2024, compared with around 32,800 units commenced in all of 2023. However, increased labour capacity may be required for the sector to be able to deliver output levels in line with commencement activity.
Construction activity ramped up in early 2024
Outlining the key findings from the monitor, Brian Hayes, Chief Executive of BPFI stated: “Today’s report shows that while there has been a 12.1% decline in housing completions in the first quarter of 2024 compared to the same period in 2023, mainly driven by the fall in the level of apartment completions, we are seeing evidence of increased construction activity with just over 53,000 units commenced in the 12 months to the end of April 2024. There were 18,000 housing units commenced in April 2024 alone, although this was possibly due in part to the expected end of the waiver on development contributions and rebate on water charges, which were subsequently extended in May to the end of this year for qualifying housing works completed by the end of 2026.”
Increased labour capacity may be required to deliver housing in line with commencement activity
Mr Hayes continued: “While commencement activity is strong, increased labour capacity may be required to deliver housing in line with commencement activity. However, indications are somewhat positive, with employment in the construction sector having increased from 147,500 in the first quarter of 2020 to 171,700 in the first quarter of 2024 and it is likely that some of the skilled labour required for this increased level of output could be transferred from other parts of the construction sector, such as office construction, where activity seems to be decreasing.”
42% of commencements for apartments, indicating potential longer lag to completions
Mr Hayes added: “While housebuilding activity remains robust, especially with annualised commencements at record levels, we will need to see how much of this translates to completed units in 2025 and beyond as under the terms of the waiver and rebate, the units have to be completed by the end of 2026. In addition, around 42% of the commencements in the first four months of 2024 were for apartments, where there is a longer lag between commencement and completions compared with traditional house building activity.”
Mr Hayes concluded: “On the demand side, declining overall inflation levels are contributing to a more positive outlook for disposable incomes, which along with a growing population and government fiscal supports for prospective first-time buyers, are likely to sustain high levels of housing demand.”
ENDS/
Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has over 125 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace.
Contact: Fiona Murphy, Head of Communications, 087 9740046, fiona.murphy@bpfi.ie or Jillian Heffernan, Director of Communications, 087 9016880, jillian.heffernan@bpfi.ie.
