Irish housing supply deficit forecast to continue through 2020
Level of apartment construction ‘disappointingly low’, Goodbody says
The greater Dublin area accounted for 59 per cent of new supply in the last 12 months, Goodbody’s figures show. Photograph: iStock
Ireland’s housing supply deficit is expected to continue until 2020 as the level of apartment building in the State remains “disappointingly low”, a new analysis of the property market suggests.
The Goodbody BER housebuilding tracker is forecasting about 18,000 completions this year, about half of the estimated level of housing demand.
That demand is estimated to be near 35,000 units per year by a number of economic commentators.
Goodbody’s figures point to some uptick in construction activity, with property completions up 31 per cent in the second quarter compared to the same period in 2017. But the volume of apartment construction appears to be a drag on the overall figures with the number of new apartments actually falling by 11 per cent in the second quarter compared to the same period last year. So far this year, the volume of apartment building has only advanced 7 per cent.
“Uncertainty about building standards over the past 12 months has likely played a role here as developers have held off on design and build until clarity has emerged,” said Dermot O’Leary, Goodbody’s chief economist.
“Changes have been announced by the Government, which should eventually feed through to increased output in this sector, but viability is still an issue in many parts of the country,” he said.
Goodbody’s figures show that the majority of new housing activity continues to take place in Dublin and its surrounding counties. The greater Dublin area accounted for 59 per cent of new supply in the last 12 months, while the midland and Border regions saw new supply fall by between 15 and 16 per cent.
Demand for semi-detached properties was reflected in the quarter, with completions in that category growing 35.3 per cent.
Goodbody’s figures come after the Central Statistics Office (CSO) released data concluding that electricity connections, a traditional data source for policymakers working on the housing market, were overstating the scale of new housing completions due to unfinished ghost estates.
While there is some disparity between Goodbody’s analysis and CSO figures, due to non-compliance with the BER regime – compulsory for all homes – the figures provide a more up-to-date snapshot of housing completions as a result of lags in the publication of official CSO data.