Housing construction rose sharply in the first four months of the year, the latest Housing Market Monitor shows.
Banking & Payments Federation Ireland (BPFI) says building began on over 30,000 housing units in first four months of this year compared with 32,800 units in all of last year.
However it says more labour may be required for the sector to be able to deliver output levels in line with commencement activity.
The report also finds a decline of 12.1% in housing construction completions compared with same period last year, mainly driven by a fall in finished apartments.
Around 42% of the commencements in the first four months were apartments, where there is a longer lag between commencement and completions compared with traditional house building.
New dwellings completed. Source: BPFIBPFI Chief Executive Brian Hayes said indications are looking positive.
"While commencement activity is strong, increased labour capacity may be required to deliver housing in line with commencement activity," he said.
"However indications are somewhat positive, with employment in the construction sector having increased from 147,500 in the first quarter of 2020 to 171,700 in the first quarter of 2024.
"It is likely that some of the skilled labour required for this increased level of output could be transferred from other parts of the construction sector - such as office construction, where activity seems to be decreasing".
Source: BPFIMr Hayes said lower inflation is also helping housing construction.
"On the demand side, declining overall inflation levels are contributing to a more positive outlook for disposable incomes which - along with a growing population and Government fiscal supports for prospective first-time buyers - are likely to sustain high levels of housing demand," he added.
The BPFI says there were 18,000 housing units commenced in April alone - although this was possibly due in part to the expected end of the waiver on development contributions and rebate on water charges.
