As Ireland’s remains firmly in the grip of a third wave of Covid-19, the construction industry starts into a second period of shutdown, in an attempt to lessen the spread of the virus. All non-essential construction will cease this evening (January 8th) until at least the end of the month. Minister for Housing, Local Government and Heritage, Darragh O’Brien said the decision to close was necessary in order to bring the virus under control.

Similar to the first industry shutdown, essential construction projects are exempt from this closure. These include critical infrastructure repairs and maintenance, health projects specific to Covid-19, works under the housing adaptation grants, and social housing projects that are due for completion within a 6-8 week period. Arguably, all housing ought to have been prioritised given that there are 20,000 fewer rental properties in the marketplace today than registered in 2017, according to the Residential Tenancies Board. However, it is heartening to see the delivery of social housing being prioritised for 2021.

In real terms, delays caused by the first industry shutdown, and the knock-on impact of the pandemic-responsive measures on housing delivery, meant that 2020 housing delivery figures were well below targets set out under Rebuilding Ireland. For both private and social housing, this latest closure will inevitably put further pressure on the 2021 market, which is starting out from a position of chronic under-supply. According to the latest commentary from Davy Research, published in the Irish Independent, Ireland’s housing crisis will be exacerbated by these new measures: “the new restrictions are likely to materially impact Ireland’s residential activity in 2021, and any rebound in housing completions relative to an already impaired 2020 out-turn is now likely to be muted”.

Looking ahead through 2021 and into 2022, the appetite for investment in Irish property remains strong, particularly the private rented sector. First-time buyer interest also remains strong, with applications for private mortgages and loans under the Rebuilding Ireland home loan scheme at record high levels. It is becoming increasingly clear that some supply-side State initiatives are required at this stage in order to support housing delivery. That said, it will be interesting to see how committed the current Government is to prioritising “good quality housing, that is available and affordable to rent and to buy”, as pledged under the Programme for Government, in the wake of the pandemic.

At Castlehaven Finance, our team supports a large number of live sites and we will continue to do this remotely throughout the period of shutdown. For the safety of our clients and colleagues who continue to carry out essential construction activities, we echo the advice issued by the Construction Industry Federation to review the CIF/HSE Covid-19 Safety Protocols and ensure that all guidelines are being observed.