State bank ‘most popular’ housing fix

The establishment of a State Housing Bank could help address the country’s chronic shortage of new homes and help address the housing and homelessness crises, according to builders and developers.

State bank ‘most popular’ housing fix

More than four-in-10 construction industry leaders are in favour of such a bank which they argue would finance housing projects and provide affordable mortgages.

The proposition emerged as the most popular “corrective action” within the industry, according to research carried out by PricewaterhouseCoopers (Pwc).

“Ensuring adequate finance is available to the sector is critical and our survey confirms this remains a key challenge.

"Available funding for the sector, whether this is for housing or infrastructure projects, is key to ensuring our economy can continue on its growth path and all options, including alternative non-bank finance, need to be fully investigated,” said PwC Real Estate Practice senior manager, Niall Cogan.

A State Housing Bank garnered significant support among developers, builders and builder material providers, despite signs that cost pressures are easing.

The number of construction industry professionals that highlighted the cost of complying with building regulations, often held up as a key impediment to new house building, as a challenge fell by more than 10% when compared with this time last year.

Similar decreases were seen for those considering the planning regime and high building material costs as major obstacles to building activity.

Instead, the biggest concern within the industry surrounded the availability of skilled workers.

The gap is an “acute” issue in the industry with almost one-in-three experiencing difficulties recruiting people with specific skills. Those with managerial skills and planning and feasibility expertise are particularly hard to come by.

“The survey suggests that while Ireland’s construction industry is in expansionary mode with positive plans for growth, revenue expectations are somewhat less than last year.

"While some challenges are easing-up, factors holding it back are the skills gap, available finance and for those who are exporting, external uncertainties such as the possible impact of the upcoming vote on a British withdrawal from the European Union,” said PwC Real Estate Partner, Ronan MacNiocláis.

He warned that the lack of suitable of accommodation is limiting the influx of talented workers into Ireland and will have knock-on effects for the attractiveness of the country to foreign direct investment if not tackled.

Meanwhile, the latest Ulster Bank Construction PMI report showed an increase in activity in the sector extending the period of growth to 33 consecutive months.

The pace of expansion eased to the slowest in seven months, however, as fuel and raw material costs increased in the past month.

“The latest Ulster Bank Construction PMI signalled ongoing growth of construction activity in Ireland during May, with the headline index remaining well above the 50.0 ‘no change’ mark at 55.9. Although the rate of expansion eased slightly, it was still marked and above the pre-downturn average.

A slowdown from the record rate of expansion seen in February was probably inevitable, but it would be reassuring to see some stabilisation in coming months,” Ulster Bank Ireland chief economist Simon Barry said.

The report found that housing activity continued to increase during May while the commercial sector saw the fastest expansion.

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