There are fears inflation will delay the delivery of badly needed housing, as the construction industry warns the majority of companies will not take on fixed-price contracts.

A new survey by the Construction Industry Federation (CIF) found nine out of ten companies are unwilling to take on fixed price contracts due to the "ongoing exceptional increases" in raw material costs.

In a stark prediction, more than 90% believe the conflict in Ukraine will lead to a further rise in construction costs over the next three months and 85% expect the price of construction projects to increase during that time.

Key challenges identified by the sector are the increased cost of raw materials (88%), access to skilled labour (72%) and fuel (68%).

CIF director general Tom Parlon said the figures show the extent of the issues in the industry.

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He added: "Over the last few months we have been highlighting the issues of hyperinflation in the industry and how that is going to impact on the pipeline of construction activity, particularly public tendering.

"Nine out of ten construction companies, which represents the vast majority of the industry, will not tender for fixed-price contracts while increases continue.

"No one could be expected to commit to a definite price for projects which could take years when costs are rising daily.

"It is practically impossible to estimate where costs are going to go based on the levels of inflation we have seen in the industry over the last 18 months and especially since the turn of the year."

The survey also highlighted issues around staffing. Almost four out of ten construction companies said their employee turnover had increased in the past three months with a similar number expecting another rise in the next three months.

Two-thirds of companies also believe the sector would benefit from attracting more women to work in the industry.

Women make up just over 9% of the construction workforce despite the industry having the highest level of women working in it on record, according to recent Central Statistics Office figures.

One in four construction jobs added in 2021 went to a female candidate, and Mr Parlon said this momentum needs to continue.

The prediction in a delay in construction comes as the booming property market is being fuelled by cash-rich expats selling up abroad and moving home.

One in every 17 houses sold in Dublin recently went for around €1million and there has been a 30% increase in the number of €1million properties sold in the city in the past 12 months, research from property agent Owen Reilly has shown.

He said the market is being affected by "historically low levels of properties for sale, there are 30% less homes for sale in Dublin now compared to 12 months ago and more than 40% less than the end of 2019 before the pandemic".

The "very strong" demand is being led by cash buyers who have cashed in on property abroad.

Mr Reilly added: "A lot of the demand is led by Irish people who have returned home to Dublin, their return may have been accelerated by the pandemic.

"So maybe they were leaving London because of Brexit, they left the United States because of how they managed the pandemic initially and other areas of the world and this is happening at a time where a lot of non-Irish executives living in Dublin, particularly, those working in the technology sector, are looking to buy instead of rent.

"More than half of our buyers in the €1millionplus range do not require any mortgage finance whatsoever and as you get closer to €2million, that figure rises to about 70% of buyers who don't require any mortgage funding whatsoever.

"So rising interest rates are going to impact first-time buyers more at the €400,000 range than the upper end of the market.

"Some of these buyers moved overseas maybe years ago, bought a home and have seen a lot of capital appreciation during that time, they are selling at a good time and find Dublin good value for money compared to some cities in Europe."

Around 20% of his buyers are buying second homes in the city. He added: "They're buying them as their Dublin base when they are in the city.

"There are also affluent families in the country buying apartments to have a pad in Dublin because the rental market is so dysfunctional, particularly for students."

"The likelihood of interest rates increasing later this year, I think over time that will definitely impact the market and perhaps take heat out of it. As long as supply stays low, I just don't see how the market is going to cool anytime soon."

Mr Reilly added: "Apartment development is also very expensive and a lot of these apartments are probably, price-wise, beyond most 'normal' buyers.

"So it is an issue but it is better that we have this stock coming on because we need to build thousands of apartments across Dublin if we want rents to at least stop rising at the rate they are rising."