Despite high input costs, there were 4.5k self-build starts in 2023 in ROI.
In this article we cover:
- Top counties for self-building
- Trends in construction
- Material price outlook
In the context of the development contribution holiday and strong rural property prices, counties Cork, Galway and Donegal recorded the highest number of self-build starts in ROI for 2023, according to figures published by the ROI Department of Housing.
4,552 one-off house projects filed a commencement notice in 2023, with over a quarter of self-building activity taking place in counties Cork, Galway and Donegal. Hot on their heels were counties Meath, Mayo and Wexford.
The ranking by county is similar to the figures recorded in 2022.
Despite the strong commencement notice figures, overall activity in the construction sector continued to fall, according to the latest BNP Paribas Real Estate Ireland Construction PMI.
January 2024 marked the seventh consecutive monthly fall in Irish construction activity; the index ticked up to 45.9 in January from 45.1 in December. A figure above 50 signals growth.
The construction industry’s better performance was due to the residential sector – while activity dropped, it didn’t drop as much as it had in previous months.
“With the temporary waiver of development contributions due to expire in April, it will be interesting to see whether the strong momentum in residential commencements during 2023 will continue over the coming months, leading to resumed expansion in the housing PMI,” John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland, said.
A report by the Institute of Professional Auctioneers & Valuers (IPAV), meanwhile, shows that house prices in the countryside are increasing whereas property prices in Dublin are stagnating.
The Central Statistics Office reported a 3.1 per cent rise in the volume of residential building between the third and fourth quarter of 2023. However, overall, there was a 5 per cent decrease in volume for the residential sector between Q4 2022 and Q4 2023.
Cost of building
Inflation is at a three month low, according to BNP Paribas, but input costs “continued to rise sharply in January” and shipping costs are on the increase.
The cost of raw materials specifically are likely to increase or stay the same in the second quarter of 2024, according to a survey of members of the Construction Industry Federation, CIF members also expect the cost of labour to increase over the same period.
Half of the CIF members surveyed expect builders won’t charge more than they did in the past three months. The main challenges for the industry were recorded as access to skilled labour, securing a healthy profit margin, and the cost of raw materials increasing.
