Both NI and ROI have also seen house prices increase by over 7 per cent in the first quarter of 2021.
Local house prices grew by 7.4 per cent in NI in the first quarter of 2021, as compared to the first quarter of 2020, to an average of £154,012, according to a survey by Nationwide Building Society.
The daft.ie report, meanwhile, reveals that in ROI prices on average were 7.6 per cent higher in the first quarter of 2021 than in the first quarter of 2020, averaging at €275,751.
Building cost increase
The cost of timber continues to be hit by administrative delays; figures issued by quantity surveyor Linesight show that timber prices are rising by 4 per cent to 5 per cent, ahead of construction inflation which is to hit 3 per cent in 2021.
As reported in the Irish Times, Linesight forecasts a price rise of up to 4 per cent for concrete, increases of 6 per cent to 8 per cent for insulation, 4 per cent to 5 per cent for copper cable and 3 per cent to 4 per cent for some aluminium materials.
The impact of Brexit on ROI, according to Linesight, could lead to “significant increases in the cost of key materials such as steel, insulation and timber, largely driven by increased logistics costs and supply chain constraints.”
Building costs continue to rise while the housing shortage, partly caused by the pandemic, has led to a surge in house prices in both NI and ROI.
BBA certificates, which certify products to British standards, no longer being recognised in ROI will also impact the construction sector, according to their survey.
Aecom’s annual review in relation to NI says that longer term, a Brexit guarantee of no tariffs on goods should help mitigate short term cost increases in materials.
Aecom estimates it costs between £1,000 and £1,600 per sqm to build a house in NI, and between €1,450 and €1,850 to build one in ROI.
An Ernst and Young study commissioned by the Construction Industry Federation highlighted that ROI could now miss its target of building 25,000 homes this year by as much as 60 per cent.
Meanwhile, as pointed out in the Irish Independent, a Project Ireland 2040 government report shows that the Irish construction sector is exceptionally unproductive.
There has in fact been minimal labour productivity growth in Irish construction from 2000 to 2016.
The Build: Construction Sector Performance and Prospects 2019 report shows the Irish construction sector is ranked at 14th out of 19 Euro area countries; it is also 24 per cent below the European average.
In contrast, Irish productivity across all sectors is 34 per cent above the European average