A further 80,000 new homes will be built this year, a construction cost management firm predicted yesterday.

Davis Langdon, in its annual review of the construction industry, said housing now accounts for more than 60 per cent of construction output.

It said it estimated that 81,000 new houses were completed in 2005 and that construction activity will grow by 1 per cent in 2006. However, it believes a decline in the houses being built will begin in the coming years as market demand is met.

"The phenomenon that is the Irish construction industry continues its remarkable journey, with the industry set to record its thirteenth successive year of growth in 2006," said Norman Craig, group managing director. He said growth in 2005 was 4.5 per cent.

House prices in Dublin increased by 21 per cent in Dublin in 2005, Douglas Newman Good said yesterday.