Builders across Ireland are reporting frequent price increases from suppliers as volatility in global markets continues to feed into the construction sector, according to the Construction Industry Federation (CIF).
Speaking on RTÉ’s Morning Ireland ahead of the House Building Summit in Dublin, CIF Director of Housing and Planning Conor O’Connell said contractors are receiving “daily notifications” about rising costs for key materials including concrete, insulation, and plastic piping. He attributed the increases to broader macroeconomic pressures affecting supply chains and energy inputs.
The summit at Croke Park has brought together house builders, developers, policymakers and government representatives to examine ongoing housing shortages and ways to accelerate delivery. The Government has set a target of 300,000 new homes by 2030, but construction levels continue to fall short of demand.
House prices remain at record highs. The national property index is now 25 per cent above its previous peak during the 2007 property boom and 179 per cent higher than the post-crash low recorded in 2013, underlining the scale of the recovery in prices over the past decade.
When asked whether ongoing instability in the Middle East could push prices higher, O’Connell said it was difficult to predict short-term movements, noting that the market is highly sensitive to any change in input costs. He said even modest increases in materials can quickly feed through into overall development costs.
He pointed to recent government measures aimed at supporting the sector, including major investment in water infrastructure, reforms to planning processes, a reduced 9 per cent VAT rate on completed apartments, and enhanced corporation tax relief for certain developments.
Despite these supports, he highlighted ongoing cost pressures within the sector, particularly for small and medium-sized builders and civil engineering firms, many of whom rely heavily on diesel-powered machinery. He described the recent cut in excise duty as a necessary but temporary measure to offset fuel-driven inflation.
Major listed developers Glenveagh Properties and Cairn Homes reported strong operating profits last year, benefiting from sustained demand, with earnings of €125 million and €168.6 million respectively.
O’Connell said the sector has repeatedly adapted to external shocks in recent years, including the Covid-19 pandemic, Brexit, and the war in Ukraine. He expressed confidence that it would continue to manage current challenges, though he acknowledged that cost volatility remains a key concern for future housing delivery.
