BPFI Housing Market Monitor highlights potential disparity between housing demand and residential construction capacity7th June 2017
Banking & Payments Federation Ireland (BPFI) today published the BPFI Housing Market Monitor for Q1 2017. The monitor draws on a range of published data under the three key headings of housing supply, housing prices and rents and housing transactions for its assessment of the current state of the housing market.
In his commentary accompanying the report, BPFI’s Chief Economist, Dr Ali Uğur, questions whether residential construction capacity can match the current housing demand citing recent concerns voiced in relation to the supply of labour within the residential construction industry:
“Recently, commentators in the industry have raised concerns around the labour supply potential of the sector in order to meet required demand in certain sub-sectors such as residential construction. The Construction Industry Federation (CIF) estimates that apprenticeship numbers in the sector must rise from around 2,200 at its current levels as of end of 2016 to 4,000 by 2020 in order to deliver housing and infrastructure requirements. The level of new apprenticeship registrations in the sector declined at an unprecedented rate from a peak of almost 7,000 in the period 2004- 2006 to a low of 645 in 2010. The level has only picked up marginally since then and reached around 2,200 in 2016.”
Examining the potential for foreign nationals to plug this possible labour shortage, Dr Ugur cautions that although a major source of labour during the boom, the current environment in terms of the rental market and housing supply could present challenges to this solution:
“During the peak construction period between 2005 and 2007, foreign nationals were a major source of labour supply, however, this source of labour supply brings with it its own challenges in terms of housing and other infrastructural requirements when added to the existing labour pool. It should also be noted that current conditions in relation to availability and cost of housing in Ireland is not similar to the conditions back in 2005, with higher rental prices as well as lack of suitable housing stock in certain areas, particularly in Dublin which may create further challenges in attracting foreign nationals to Ireland to work in the construction sector.”
To view the report, click here.
Note: Banking & Payments Federation Ireland (BPFI) is the voice of banking and payments in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.
Contact: Jillian Heffernan, Head of Communications, 087 9016880