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Supply chain constraints will push up house prices, say builders
Pic: RollingNews.ie

25 May 2021 / ireland Print

Supply chain constraints will push up house prices

Increased timber prices and supply-chain issues, exacerbated by COVID-19 and Brexit, have increased the cost of new-home building materials, according to a survey carried out by the Irish Home Builders’ Association (IHBA).

Director James Benson said the body had seen a significant increase in building materials costs, coupled with a “worrying” shortage of available product.

“This cost increase is putting further pressure on the supply of new homes and could potentially lock even more people out of the market,” he said. 

“These increased costs will have to be taken on by either the buyer or the builder. Adding these costs to house prices could limit a borrower’s ability to secure a mortgage.

Purchase price

“However, if these increased costs are not added to the purchase price on new homes, profit margins would be halved and builders prevented from qualifying for finance to fund further houses or projects.”

However, he said that potential home-buyers will be helped by shared equity schemes, along with the extension of the ‘Help to Buy’ scheme, which offers tax relief to help first-time buyers secure a mortgage to buy or build a house.

“We also need to see the controls on consumer credit and lending take account of the increasing cost of delivery.

“With further cost increases expected due to supply shortages in the second half of the year, these initiatives are more important than ever,” he said.

Key findings

  • Average three-bed semi (95sq/m) home could see a product inflation range of between €12,000-15,000 by the end of 2021,
  • Bricks – approximate increase in price of 4% since December 2019, and increase of approximately 1% in 2021. Due to Brexit, there have been large delays on bricks coming from Britain due to congestion in customs and ports. With industry reopening after the latest lockdown, some suppliers are predicting lead times could increase to 4-15 weeks, depending on brick type,
  • Concrete -– increase of 4% since December 2019, and 1% in 2021 so far,
  • Insulation – approximated increase of 13% since December 2019 and 12% since the start of 2021,
  • Plywood – approximate increase of 12% since December 2019, and 11-12% in 2021,
  • Shipping / transport – increases of 32% since December 2019,
  • Softwood – increase of 31% since December 2019,
  • Steel – approximate increases of 15% since December 2019,
  • Timber frame – increases of 15% since December 2019. Suppliers quote a further 4% coming in Q3 2021, coupled with an additional 5% for Q4 2021. This could add an additional €3k per housing unit.


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