The surging cost of building materials is set to keep house prices at Celtic Tiger levels despite increasing supply.
That's the warning from the Banking and Payments Federation.
The latest Housing Market Monitor for the first three months of the year shows that while an increase in supply in housing may be easing the growth in property prices, this could be offset by the cost pressures building up in relation to construction input prices.
The organisation says the cost of building materials has jumped by over 18% in the year to April. That's the second highest increase since June 2000.
Brian Hayes, CEO of the Irish Banking Federation, says the most recent data showing there were 32,456 units commenced in the twelve months to April 2022, is a healthy sign of the pipeline for completions.
"However, while building more homes in order to try meet required demand, it will be important to scrutinise cost increases in the sector and, where possible and minimise the impact of building cost inflation on home prices. This could help to provide better affordability for potential home buyers given that average home prices are increasing faster than the incomes of potential home buyers" he concluded.
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