ESRI: 'Inevitable hit' to number of new homes built this year due to January lockdown   

The ESRI says the lockdown means Ireland will inevitably fall further behind fulfilling the demand for 30,000 new homes per year. Picture: Joe Giddens/PA Wire

There will be "an almost inevitable" hit to the number of new homes built this year amid the closure of significant parts of the construction industry, professor at the Economic and Social Research Institute, Kieran McQuinn has warned.        

The ESRI had forecast 19,600 homes would be built this year after an estimated 18,800 homes were built in 2020, and the completion of around 21,240 new homes in 2019. 

However, Prof McQuinn said that the restrictions in January will lead to "an almost inevitable" effect on the number of new homes under construction this year.  

Kieran McQuinn, research professor at the ERSI, warns that including parts of the construction industry in the current lockdown is adding to Ireland's economic uncertainty. Picture: Sasko Lazarov/Photocall Ireland

He said that the fact that parts of construction are being included in the lockdown will add to uncertainty for the rest of the year for the industry.   

The Government said that non-essential construction will end this week, as part of its package of measures to curb a large rise in the cases of Covid-19.

Some parts of the construction industry are exempt, but major housebuilders anticipate they will close down building sites at the end of Friday. 

Prof McQuinn said that demand required about 30,000 new homes to be built each year for a number of years, and that "we will just fall further short of that target given the nature of the lockdown restriction". 

He also said that the restrictions on construction will also have an effect on the Government finances and will lead to "a sizeable increase" in the number of people on the pandemic unemployment payments as thousands of building workers are laid off.                  

However, the Construction Industry Federation, which also represents housebuilders, said that building sites had managed to keep Covid-19 out of its sites and sites in Britain were being kept open by the authorities there.      

"The impact of the current lockdown on the industry will take months to calculate," the CIF said. 

"The previous lockdown may have resulted in 5,000 fewer homes than expected in 2020. In addition, we estimate somewhere around 10% output, circa €3bn, was lost due to the lockdown," the business group said. 

Shares in the two largest housebuilders, Cairn Homes and Glenveagh Properties, were weighed by the new January restrictions.

Their shares fell slightly but failed to join in a global stocks-buying splurge that helped shares in AIB and Bank of Ireland soar by 9% and 5.5%.

Business group Ibec said the Government's finances were in good shape to meet the latest health challenge. 

“The business community supports the Government’s call for a collective effort in suppressing the rising number of Covid cases and will play its part in this endeavour," said its chief executive Danny McCoy.

“The speed by which vaccines are rolled out will be central to efforts to tackle the health crisis. Once again, Ibec is calling on Government to urgently and collectively work with business to expedite the widespread rollout of Covid vaccines and promote a greater role for speedier and cost-effective antigen testing," Mr McCoy said.