The recent downturn in the Irish economy has affected all aspects of the property sector, including estate agents and property developers. The house building and construction industry is a major portion of the Irish economy and in the last two years over 200,000 jobs have been lost. One estimate put the current number of construction industry related jobs in Ireland as around 180,000.
Many contractors involved in construction projects face major difficulties on obtaining payments for work done on time. Late payments and sometimes non payments have become increasing common. The banking industry has became extremely cautious in extending credit and overdraft facilities to both clients and contractors in the construction industry.
The government has earmarked €6 billion under the National Development plan, but a spokesman for the Construction Industry Federation recently stated that the CIF could track only a maximum of 1.5 billion of this amount actually being awarded as contracts to the construction industry.
CIF Director General Tom Parlon recently stated: "...most building, civil engineering and specialist contracting companies report that they have little or no work beyond March 2010. The prospects of significant job losses early next year is therefore extremely real. Recent figures from Kavanagh Fennell's Insolvency Journal show that a total of 394 construction companies have been declared insolvent in the first eleven months of 2009. Based on current and likely future output levels, 100,000 jobs may be lost in the contracting sector next year"
Demand for 3 Bedroom Houses
A recent article in the Irish Times newspaper estimates the number of currently empty properties in Ireland at over 300,000.
The fall in property prices over the last two years now allows buyers to purchase in areas closer to the centre of large towns, near other family members or closer to their place of employment.
The Irish Times article reports that almost 1,000 repossession orders were issued in 2009, and that over 26,000 home owners are now at least three months in mortgage arrears, so many more repossessions may follow in 2010.
However, it may well be that houses that have been repossessed by mortgage institutions will be withheld from the property market to avoid increasing the already large stock of houses for sale, which would drive house prices down further.
