CIF Director Outlook 2019 – Hubert Fitzpatrick, Housing, Planning & Development

With a number of positive indicators for Irish construction in 2019, but also some major issues to be addressed, CIF directors are positive but cautious about industry prospects in the year ahead.

 

Hubert Fitzpatrick, Director, Housing, Planning & Development

In 2018, approximately 19,000 new housing units were completed. The projection for 2019 is for 22,000 to 23,000 unit completions, which falls short of the targeted requirement of 25,000 to 35,000 units annually. The key challenge facing the house building industry in 2019 is securing continued growth in housebuilding numbers.

Challenges for housebuilders in 2019 will include increased costs arising from updated building regulations and standards under Part L (Conservation of Fuel and Energy in Dwellings) relating to nZEB and Part F (Ventilation). It is also anticipated that further consultations will take place in relation to Part B (Fire) during the year.

The movement of soil and stone was problematic during the year 2018, and I am hopeful that advances can be made in the area in the first half of 2019. The industry looks forward to anticipated clarifications from the Environmental Protection Agency (EPA) in relation to the movement of soil and stone under the Article 27 process, which should streamline the process for the industry. Also, the suggested increase in thresholds for permitted sites from 100,000 tonnes to 200,000 tonnes, if implemented, will be welcomed.

The launch of the Housebuilding Finance Ireland initiative is now long awaited. It is intended that the HBFI will provide development finance to industry for projects of greater than 10 units on ‘ready-to-go’ sites by February. This will provide better funding opportunities for builders in emerging areas during the year.

The Commission for Regulation of Utilities standardised water connection charges will bring greater clarity to connection charges payable countrywide. While the final decision of the Regulator is awaited, the industry must fully understand Irish Water requirements going forward and, in particular, how to secure appropriate quotations for supply effectively and efficiently. However, the industry must also understand the new standards for laying of services now sought by Irish Water to ensure that their standards are met.

Much work was undertaken in 2018 on the drafting of a development bond that would apply for a fixed period. Hopefully, this nature of bonding will be finalised at an early date in 2019. I welcome the publication of the Department of Housing, Planning & Local Government Guidelines on Urban Development and Building Heights. This should enable members to reconsider some of their apartment projects, which may have been on hold due to viability, and review their viability for 2019.

The Land Development Agency, announced by Government in 2018, has set its targets for the development of State lands with an immediate yield of 3,000 homes and a projected yield on other State and local authority land of 7,000 homes.

This will present an opportunity for the wider construction industry to enter into arrangements with The Land Development Agency for the construction of a substantial number of homes in 2019.

Funding for infrastructure will continue to be a major requirement for industry into 2019. Significant lands have been zoned and are not yet serviced. Announcements by Government in the National Development Plan 2018-2027 (NDP) for significant investment in infrastructure are more than welcome.

The industry is experiencing major challenges with utility companies such as ESB Networks and Irish Water. We will continue to work with the utilities in addressing member difficulties and the level and timing of services available to members. However, the resourcing of the utility companies is critical for the continued growth in housebuilding levels in 2019.

Finally, other challenges for 2019 will include rising costs due to wage inflation and the scarcity of specialist trades and contract works. The culture of compliance in the industry is now of paramount importance, particularly so since the commencement of the Building Control Amendment Regulations in 2014. The remaining piece of the jigsaw, the establishment of CIRI on a statutory footing, is now awaited from Government. This is fully supported by the housebuilding industry.

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