Coalition urged to detail rules to spur building

There are tentative signs that the shattered construction industry is at long last responding to the acute shortage of new houses.

Figures published yesterday by the CSO showed that residential construction grew for the sixth quarter in a row, suggesting that new home construction is beginning to stir.

Figures by the Private Residential Tenancies Board showed rents climbed 8.6% in September from a year earlier.

Analysts said the Government will need to do more by detailing building standards by the end of the year, to help spur homes building.

The Coalition was caught out by the unexpected surge in demand for homes to rent and to buy — and has struggled to respond even as the costs of rents has soared in the past year.

The CSO figures show that residential housing grew over 36% in volume terms from the same period a year ago, and up from the 25.7% jump recorded in the third quarter of 2014.

The figures are seasonally-adjusted and so take account of the skewed monthly pattern of activity in the building industry.

The latest increase marks the sixth quarter of year-on-year increases and follows an increase of over 48% in the second quarter, a 38.6% rise in the first quarter, and a 37% year-on-year rise posted in the fourth quarter of 2014.

House building here was devastated by the crash.

After six years of massive annual decreases, home building production only started growing again in 2013.

Davy Stockbrokers said the plans in train will start alleviating the huge supply constraints in the market.

These plans include those of bad bank Nama to help build 20,000 houses in Dublin, and well-flagged plans by stockmarket-listed builder Cairn Homes to focus building in the Dublin region.

“Nevertheless, these developments will take time to show up in the completions and output data,” said the broker.

It said “a timely announcement” in the next few weeks by the Government detailing new building standards would do much to remove uncertainty for builders.

The CSO figures show residential housing drove the increase in the construction in the quarter.

Other sectors however were a lot more sluggish or contracted in the three months to the end of September.

The volume of output in civil engineering fell 5.9% in the year.

The volume of non-residential building work and civil engineering fell 4% and 2.6% from the previous quarter, though such is the “unprecedented” low activity the CSO cautions on the reliability of these statistics.

Business groups have long highlighted fears about the shortage of houses.

The Cork Chamber of Commerce has warned that recovery could be held back in Munster because executives of multinationals cannot find suitable homes.

Monthly CSO data on rents — which gave soared in the past year — have become a reliable guide to the extent of the housing crisis.

Goodbody Stockbrokers said last month that shortages was the biggest bottleneck in the economy.

It estimates that fewer than 7,000 new houses will be started this year, compared with around 20,000 units that will be needed annually to meet demand.

The broker said: “Recently announced Government measures should help increase supply, but there is no silver bullet.”