House completions down 33% but output has rebounded

Slowdown in commencements and mortgage drawdowns means full impact may take longer to become clear

Goodbody expects housing completions to fall  20%  year-on-year in 2020

Goodbody expects housing completions to fall 20% year-on-year in 2020


House completions fell by a third in the second quarter compared to the same period last year, but new data suggests output has rebounded since lockdown measures were eased and construction sites reopened in May.

The Goodbody Analytics BER Housebuilding Tracker for the second quarter of 2020, published on Tuesday, indicates that the 33 per cent year-on-year reduction is the largest annual decline in housebuilding in eight years.

However, Goodbody says the figures are “ahead of our expectations”, and suggest that housing output “has rebounded somewhat” after construction sites reopened in the middle of May.

Goodbody still expects housing completions to fall by 20 per cent year-on-year but has revised up its estimate from 14,000 to 16,500.

For 2021 it now expects 19,500 completions, which is up from its previous estimate of 16,000.

The figures are still less than half of what is required to tackle the housing crisis, with the Central Bank estimating that 34,000 new homes must be built every year for the next decade to meet demand.

Dublin experienced the largest decline in housing output in the quarter – down 48 per cent – but large-scale declines were seen across the State. Scheme completions fell by 37 per cent; apartments by 35 per cent; and single properties by 24 per cent.

Housing commencements fell by 46 per cent, with the largest decline of 68 per cent in Dublin’s commuter counties. The capital was the relative outperformer on this metric, down just 27 per cent.

“This suggests that builders are focusing on completing existing sites and suggests that the pandemic will have longer lasting impacts on output levels beyond 2020, thus returning to estimated demand levels of about 35,000 will take even longer,” the report notes.

Smaller builders

There was a 40 per cent decline in new home sales in the quarter. Sales in Dublin fell by 44 per cent, with sales outside the capital down 35 per cent. Overall, smaller builders outperformed, “possibly reflecting a short-term focus on cashflow”, the report says.

Larger developers suffered greater declines in sales during the quarter, with Cairn Homes and Glenveagh Properties down 68 per cent and 64 per cent respectively.

However, Goodbody is forecasting that both companies will be down 35 per cent in the year as a whole, before a “significant recovery” in the region of 50 per cent during 2021.

More generally larger developers have seen larger declines in sales over recent months relative to the wider market. While new home sales fell by 43 per cent year-on-year overall, the market fell by just 28 per cent when the 10 largest builders are excluded.

All price categories experienced significant declines in sales in the quarter. In the first six months of the year sales in the €325,000-€400,000 cohort performed best, with sales down by just 2 per cent.

“Based on the cost of building and the income distribution of the population, this is the price bucket which we describe as the sweet spot,” says the report.


On mortgages, the report finds the 35 per cent decline in drawdowns during the quarter was “not as bad as feared”. However, approvals “continue to be weak, suggesting that the full impact on the market is yet to be seen”.

The report adds that Goodbody’s forecasts, published in May, “assumed a near cessation in mortgage activity” in the quarter (down 80 per cent year-on-year). “This was clearly too aggressive an assumption,” it says.

It thus revises its mortgage forecast upwards to €6.9 billion from €5.7 billion previously. However, this would still represent a decline of 28 per cent on 2019 levels. For 2021, Goodbody is now forecasting a mortgage market of €7.7 billion (up 12 per cent).