Rising building costs 'could lower housing supply and increase prices'

Supply shortages – partly due to the disruption of construction activity during the Covid crisis – pent-up demand from buyers unable to purchase last year due to pandemic restrictions, and a build-up in household savings have driven house price growth, new report says

Bank of America has warned that new housing output may be stymied by rising construction costs, with property prices also potentially rising as a result.

Rising construction costs could hinder the supply of new houses and fuel a further increase in existing house prices, Bank of America has warned.

In a detailed report on the Irish housing market, Bank of America said current house price increases have been “stronger than expected”. It said it still expects Irish house prices to “maintain firm growth” across the remainder of this year.