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Builders deny claim they are refusing work until profit margins rise

Published 03/05/2016

Builders deny they are waiting for profits to rise before taking on new work
Builders deny they are waiting for profits to rise before taking on new work

Ireland's builders have slammed claims they are on a de facto strike by refusing to construct new homes until the housing crisis pushes profits up tens of thousands of euro.

Tom Parlon, director general of the Construction Industry Federation, said building firms are having to find other work because there is no money in putting up houses.

Before a parliamentary watchdog, he dismissed suggestions that construction companies were turning up their noses at projects offering a 20,000 euro profit per house.

"I can guarantee you, any builder would take your hand off if there was a notion that there was a 20,000 euro margin in building a 300,000 house," he said.

"It certainly isn't the case at the moment."

Mr Parlon was under cross-examination by Anti-Austerity Alliance TD Ruth Coppinger at the newly-established Committee on Housing and Homelessness.

The Dail watchdog was set up to deal with the housing shortage, which has resulted in record homelessness and high rents as well 90,000 people languishing on social housing waiting lists.

Ms Coppinger claimed builders were effectively "on strike" until the government caved in to demands such as tax cuts and a help-to-buy scheme that would push up profits.

"They are holding the country to ransom until they get these concessions from the government," she said.

"If that was any other group of workers in this country they would be slated every day of the week in the media.

"Why is it that developers and the construction industry can hold off until it is profitable enough for them?"

The Dublin West TD suggested some builders were snubbing projects until they offered a 50,000 euro profit for every house completed.

But Mr Parlon dismissed the claims, saying house-building is "unviable at the moment" because of costs involved.

"Thankfully builders are finding other work than building houses at the moment, because it is economically unviable to build a house at the moment in most cases," he said.

"Maybe the developers are on strike, maybe they can afford to be on strike, maybe they have some money left over from the crash but the builders we represent, a lot of them are still underemployed."

Mr Parlon said as well as incentives, the government needs to invest in major infrastructure projects to allow new housing developments be built.

"We can't just build without substantial infrastructural investment in the roads, water and new schools," he said.

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