Home prices tipped to rise €20k

THE soaring costs of labour and building materials could add up to €20,000 to the price of a new three-bed home, a new report showed yesterday.

Some 68% of builders are seeing yearon-year increases in labour costs and 60% have experienced spiralling costs of raw materials, a Construction Industry Federation (CIF) survey found.

The average cost of delivering a threebed semi across the State is €397,000.

Residential construction cost inflation was around 4% last year and is expected to add around €20,000 to building costs this year. The cost is above the current average home sales price of €389,000.

But that national average covers all house and apartment types and sizes and not just three-bed semis, which the CIF report looks at.

Despite rising costs, turnover and employment continue to increase across the construction sector.

The survey results show that outside of companies that operate in housebuilding, there is a considerable spread in the type of construction projects that companies deliver.

General building contractors’ portfolios are broadly spread across homebuilding, commercial, industrial, health, education, office, agricultural and other – both new-build and renovation.

CIF director general Hubert Fitzpatrick commented: ‘Overall construction investment in Ireland is forecast to increase by 4% in 2024.

‘The residential, non-residential and civil engineering sectors will continue to expand during 2024.

‘While inflation is moderating, some construction products, whose production requires significant energy consumption like cement, concrete, GGBS concrete, steel and insulation, are seeing significant price increases despite the downward trend.’

He added: ‘It is essential that the Government avoids further interventions that could see further price increases in construction products, resulting in further increases in overall project costs.’