Staff shortages could impact housing delivery, warns banking industry 

There could be a delay in the delivery of residential units as the construction industry battles challenges.

Despite a strong pipeline, house building could be curtailed by staff shortages, Ireland's banking industry has warned.

Over 50,000 residential units are expected to be built between now and the end of 2023 if challenges securing the required labour due to the pandemic do not interrupt this plan. More than 30,700 housing units were started last year, a 42% increase on 2020.

However, the latest Housing Market Monitor by the Banking and Payments Federation Ireland (BPFI) highlighted that in contrast with the increasing demand for housing and supply pipeline, capacity in the construction sector is now under pressure due to Covid-related absences and labour shortages. This may result in a limited delivery of housing units required to meet the demand they warned.

“It is likely that similar absence levels may be observed in the first quarter of 2022 given the wide circulation of the Covid-19 virus in society, so output in the first quarter of 2022 may be negatively affected which could affect the overall output levels for the year,” said BPFI chief executive Brian Hayes.

Latest figures from the CSO outlined that absences in the construction sector in the last quarter of 2021 were at nearly 12%, similar to levels observed during the last quarter of 2020. Yet, the rate of absence in the sector pre-pandemic was around 8%.

Along with this jump in supply, there is also increasing demand. There were 43,494 mortgage drawdowns valued at €10.5bn in 2021, up 22% in volume terms and 25% in value terms on 2020, a recent report by the BPFI showed.

“In 2021 we recorded the highest levels of mortgage approvals since our data series began in 2011 with the value of approvals alone jumping by 30% to €13.4bn,” said Mr Hayes.