Ireland’s Construction Sector Struggles to Expand, Warns Central Bank
Ireland is facing significant challenges in meeting the need for 52,000 homes per year until 2050, as highlighted by the country’s Central bank. Housing has been a pressing political issue due to a slow recovery in the construction sector following the 2009 property crash, causing house prices and rents to outpace income growth. Although supply reached a 15-year high of almost 33,000 units last year, it is projected to dip before reaching 39,000 in 2026. To surpass the 50,000 mark, policy changes are essential, including streamlining planning processes, increasing development finance, enhancing construction productivity, and making more zoned and serviced land available.
Robert Kelly, the Central bank‘s director of economics, emphasized the need for improvements in these areas for the government’s target of 50,000 units annually to be achievable. The report proposed directing public capital investment towards infrastructure, funding more serviced land, incentivizing modern construction methods, and leveraging the state’s balance sheet to attract private equity investment. Failure to address the supply and demand imbalance could result in higher living costs and business expenses, potentially jeopardizing Ireland’s attractiveness as a destination for foreign direct investment.
In its quarterly economic forecast update, the Central bank maintained its projections for economic growth and Inflation, with modified domestic demand expected to grow by 2.4% this year.
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Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.