Kieran McCarthy: Future building in 2024

Kieran McCarthy looks at key issues impacting building and renovation works in year ahead

Kieran McCarthy, KMC Homes, engineer, builder and co-presenter of Cheap Irish Homes. Picture Denis Minihane.

Dear Kieran, 

On behalf of our readers, we would like to express our gratitude for the many terrific insights offered by your good self over the past 12 months in response to questions from those who enjoy and appreciate your Property Clinic.

As we draw a line under 2023 and prepare for the year ahead, perhaps you could give us an overview of the key issues that exercised our readers last year, and what you expect will be the main challenges and opportunities householders might face when seeking to carry out home improvements in 2024?

Yours in ongoing appreciation, 

Tommy Barker, Property Editor.

Dear Tommy, 

Thank you for your question and wishing you, your team, and all our readers a happy and safe new year. 

In my view, the two main things that are affecting the Irish, and indeed global construction markets are inflation and interest rates. This time last year we were well in the cycle of rising interest rates and still rising inflation with no end in sight. 

For me, the main difference this year is that it appears that interest rates are holding firm, for now, and there are some tentative signs that inflation too has stabilised. As no one can predict interest rates, let’s have a more detailed look at inflation.

"What I am finding now is that raw and simple materials are somewhat stable and in places have, in fact, dropped in price"

In my experience, last year we were are still looking at material inflation up to last summer, though it was certainly tapering off at that stage. I generally speak to timber suppliers and builders merchants to get a sense of what the headline trends are in terms of material purchase prices, and I posted on my Instagram feed (@kierankmc) back in February that timber prices had, in fact, begun to drop at that stage. I am always conscious of giving a false sense of security early in the year, as the year before last we had some positive signs just before the outbreak of war in Ukraine — but as the year wore on, this trend towards price stabilisation continued. 

What I am finding now is that raw and simple materials are somewhat stable and in places have, in fact, dropped in price and that the main drivers of inflation are more in the more complex mechanical, electrical, and ventilation products whose component parts can come from all over the world.

One of the bigger issues we are experiencing, and will continue to experience, is labour shortage. It is true that post the global financial crisis a lot of skilled tradespeople either emigrated or retrained to work in other sectors, but little has changed since. We have a huge lack of young people taking up apprenticeships and in most circles. When people talk about leaving school, the conversation gravitates around the university points race. 

Yes, there are jobs to fill in the professional sector, but our house prices and build environment depend on the next generation of tradespeople entering the labour force. This is not a topic that is discussed in the media in any meaningful way and I would certainly like to take this opportunity to air this growing issue.

In terms of trends, we are still grappling with elevated energy prices with a particular focus on electricity. In most new builds, and indeed deep retrofits, electricity is the only energy input required to heat and power the house as the heating system tends to be air to water and in many cases people are tending to fit an induction hob. 

"We are still grappling with elevated energy prices with a particular focus on electricity." Picture Denis Minihane.

As a result, people are finding their (electrical) energy bills are high and are looking at ways to offset this. What has really gained ground here is the advent of Solar Photovoltaic (PV) roof panels which generate electricity from the sun to augment the electricity required for the national grid. This can dramatically reduce your electricity bills, particularly in summer when you can effectively be off the grid if not a net producer, where you sell electricity back to the grid. People are also fitting batteries and Eddi systems whereby they can either store unused power for later use (eg at night) or, in the case of the Eddi system, they can use the spare capacity to heat their hot water.

Government grants are, of course, a huge topic of discussion. There are SEAI Energy saving grants for upgrading your home in terms of insulation, airtightness, heating systems, ventilation systems ,and windows, and these are certainly very popular, though the paperwork process can be demanding, so best to plan well in advance here and chose contractors who are SEAI registered and experienced in this field. You have a choice here whether you wish to apply for a single measure or a full deep retrofit, so again, much planning and careful consideration is required in advance of making your final decision.

The remaining grants available are the Vacant Homes Grant, The Derelict Homes Grant, and the Help to Buy Scheme. The Vacant Homes grant provides for up to €50,000 to renovate a property once it has been vacant for over two years, and the Derelict Homes Grant provides a further €20,000 if the house has been classified as derelict. 

This has certainly opened many peoples’ eyes to the possibilities of taking on a Cheap Irish Homes project, particularly when you consider that you can still apply for SEAI grants for the energy-saving measures required in these projects. My advice here though, as always, is buy a house in as good a condition as you can afford, because even with these grants available, it will still cost a lot in terms of time, money, and stress to apply modern construction methods and building regulations to an older house than paying a little more for a house with the benefit of these features already in place.

Maggie Molloy and co-presenter, Property & Home columnist Kieran McCarthy.

The Help to Buy Scheme allows people to buy or indeed build a new home as long as the value of the home or construction project is less than €500,000. If these conditions are met, then there is a grant of up to €30,000 available, which is a huge help to purchasers and self builders who would not be eligible for the Vacant Home or SEAI grants, as these grants are only for older buildings.

In terms of the year ahead, my hope, like everyone else, is that inflation continues to stabilise and indeed recede, and that we might optimistically see a similar trend with interest rates towards the latter end of the year. There is no doubt that with the growing focus on climate change that gained much ground last year due to the myriad weather events experienced in Europe last summer and the recent groundbreaking fossil fuel agreement at Cop28, that our homes, both new and old, will continue to become more energy efficient and that the days of fossil fuels in our homes and indeed our cars are drawing to a close.

A sign for the COP28 U.N. Climate Summit in Dubai, United Arab Emirates. (AP Photo/Rafiq Maqbool, File)

This is a good thing. It will take a huge mind shift and investment, but it is where the world is headed now. We will need to retrofit our older homes and continue and enhance the designs of our newer homes, vehicles, offices, and industries with a renewed urgency.

This drive, along with the beginnings of AI, will set the roadmap for construction for the next decade, if not longer.