Dublin house completions hit 10-year high but commencements drop

Latest Dublin Economic Monitor highlights strong end to year for construction

Housing completions in Dublin hit a 10-year high in the final quarter of last year despite the pandemic causing widespread disruption across the construction sector.

The latest Dublin Economic Monitor, a report compiled on behalf of the city’s four local authorities, said the number of new homes completed in the capital between October and December rose to 2,472.

“This level was 21 per cent above the same quarter in 2019 and will provide much-needed supply to a housing market which is currently dealing with a significant demand-supply imbalance,” it said.

However, the report highlighted a fall-off in housing commencement notices, an indicator of future supply, which were down 25 per cent in the final quarter.

It also noted that the first quarter of 2021 is likely to see a further regression as Covid-19 restrictions have halted most construction in Dublin.

New home completions nationally totalled 20,676 last year, considerably more than had been forecast at the height of the first lockdown when the majority of building sites were forced to close.

Apartment completions

The headline number was boosted by a surge in apartment completions in the final quarter.

However, the Irish Home Builders’ Association (IHBA) has warned that up to 8,000 homes could be removed from the supply chain this year as a result of the current restrictions, which extend to about 60 per cent of the residential construction industry.

The Dublin Economic Monitor noted that house prices in the capital recorded modest growth in the final months of 2020, up to and including December, with residential prices growing 1.2 per cent year on year.

However, it warned that Ulster Bank's exit from the market was a concern as "reduced competition may place upward pressure on interest rates which are already amongst the highest in Europe".

“Despite this, pent-up demand and a restricted supply pipeline mean house prices have yet to fall to the extent forecasted at the outset of the Covid-19 pandemic,” it said.

The report also highlighted that retail spending contracted in the fourth quarter despite Christmas rush, falling 4.8 per cent quarter-on-quarter, while tourist numbers fell 19 per cent quarter on quarter and were down 62 per cent on an annual basis.