Building Material Prices Rise 1.8% in February, Highest Since October 2023
Building material wholesale prices rose 1.8% in February, the highest since October 2023, driven by geopolitical factors. The government extended fuel support to essential construction vehicles amid rising costs. Housing completions remain below targets, despite efforts, with prices still climbing nationally.
Wholesale prices for construction materials increased by 1.8 per cent in February, following a 1.5 per cent rise in January, marking the highest inflation rate since October 2023, according to the Department of Finance. The capital goods price index, covering inputs and wages, also rose by 2.6 per cent. Geopolitical developments and skill shortages are cited as factors that could further elevate costs.
Despite record commencement notices in 2024, partly due to expiring development levy waivers, which are expected to support home completions, the Department notes that more planning permissions are needed to meet the Coalition's goal of building 300,000 homes by 2030. The ESRI warns that projected completions in the mid-30,000s for this year and next remain insufficient to bridge the housing supply-demand gap, potentially exacerbated by recent energy price spikes.
In response to rising fuel costs, the Government confirmed this week that essential construction vehicles would be included in its latest fuel support package. This decision follows widespread protests and the industry's arguments about the impact of global oil price shocks. While residential property price inflation is lower in Dublin due to improved supply, prices continue to climb, with Dublin seeing a 6.1 per cent annual increase in January, and areas outside the capital experiencing a 7.7 per cent rise.