Covid restrictions push down new housing output

New home completions fell marginally last year as Covid restrictions forced many building sites to shut in the spring.

Central Statistics Office (CSO) figures show 20,433 new homes were constructed in the State in 2021.

This was 0.5 per cent less than the 20,526 homes completed previous year.

The total lags the actual level of the demand in the market, which is estimated at 33,000-35,000 units.

Remote working: just what will it look like after the pandemic?

---

Fed signals March rate rise as it fights rampant inflation

---

IMF warns elevated inflation will persist longer than expected

---

Company formations at a record high last year

---

However, a significant pick-up in housing starts is expected to bolster supply in the coming years.

The latest figures show a quarter of all completions in 2021 were apartments. Apartment completions rose by 30 per cent from 3,920 in 2020 to 5,107 in 2021. More than three-quarters (78 per cent) of apartments completed in 2021 were in Dublin.

The figures come amid an influx of foreign investment into the real estate sector here. Most of it has been invested in the building of apartments in urban areas such as Dublin, where high rents generate strong returns for investors.

The CSO figures show just under a third (30.3 per cent) of housing completions in 2021 were in Dublin (6,201). The Dublin region, along with the midlands, the midwest and the southeast, saw small increases in completions from 2020 to 2021.

Final quarter

There were 7,326 home completions in the final quarter of 2021, which represented a 5 per cent drop on the same period in 2020.

Scheme dwellings (multiple units) accounted for 49 per cent of new dwelling completions in the final quarter, with 31 per cent apartments and 19.8 per cent single dwellings. This compares with 56 per cent scheme, 23 per cent apartments and 20.7 per cent single in the final quarter of 2020.

Goodbody chief economist Dermot O’Leary said: “Final home completions data just published showed that supply has effectively flatlined in Ireland over the past two years.”

“While better than initial expectations, it must be seen in the context of the ongoing increase in demand during that time, adding to the supply deficit,” he said.

“Given the surge in housing starts since last April, housing completions will grow further in Ireland in 2022 and 2023. We believe apartments will make up an even bigger share over this period, while social housing delivery will also take an increasing share,” Mr O’Leary said.

“This means that the share of owner-occupied housing will fall. Scale, funding, capacity, costs and risk can all explain why supply has failed to ramp up sufficiently over recent years,” he added.