There was continued growth in the supply of housing last year, with 32,695 completions in 2023, which amounted to a 55 per cent increase on pre-pandemic 2019 levels, according to a new report.
The latest Housing Market Monitor, which covers the final quarter of 2023, was published by Banking and Payments Federation Ireland (BPFI) on Tuesday.
It showed apartment completions, which rose by 28 per cent to more than 11,600 units in 2023, accounted for most of the 10 per cent increase in housing supply last year.
The number of completed housing units in 2023 was higher than the total housing supply in the five years between 2011 and 2015.
However, the report warned that the “declining interest” of institutional investors in financing apartments means continued State financial support will be needed in the form of risk sharing with the private sector to ensure the stability of future supply.
While houses have traditionally formed the majority share of new housing supply in Ireland, the proportion of apartments being built has risen in recent years, increasing from 16 per cent of all completions in 2019 to about 35 per cent in 2023.
The number of apartments completed in the past two years alone was more than the total number of apartments built in Ireland in the 10-year period to 2021.
The report said it was also likely that the share of apartments would increase further in the coming years as nearly half of all planning permissions approved in the period 2019-2023 were for apartments (101,883 units).
In Dublin, only 523 new apartments were bought by households in 2023 even though almost 9,100 apartments were completed during the year.
Apartments accounted for more than 81 per cent (81.6 per cent) of the 15,385 housing units under construction in Dublin by the end of the third quarter.
“This suggests that an increased number of projects aimed at social and affordable housing, as well as cost rental homes, will be coming on stream and should help to free up supply for household purchasers and in turn, ease the demand pressure from potential homebuyers,” said BPFI chief executive Brian Hayes.
The report also showed that housing commencements increased by 59 per cent in January compared to the same period last year. This equated to 3,357 housing units started during the month.
“Promisingly for the year ahead, over 32,800 housing units were commenced in 2023, nearly 22 per cent more than the level of commencements in 2022,” said Mr Hayes.
Mr Hayes added that continued State support was needed to ensure the stability of future supply.
“We expect further increase in housing supply in 2024,” he said. “However, it is likely that a significant share of output in 2024 will be accounted for by apartments. Given the declining interest of institutional investors in financing the development of apartments, the State will have to play an increasing role in terms of risk sharing with the private sector to ensure the stability of future housing supply, in addition to current initiatives aimed at improving the viability of some of the projects.”
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