Uncertainty on building standards triggers apartment supply fall-off

Supply of new apartments fell 10 per cent in third quarter, Goodbody tracker indicates

In the third quarter of this year, apartment completions in the Republic fell by 10 per cent to just 355, Goodbody Stockbrokers said. Photograph: Eric Luke

In the third quarter of this year, apartment completions in the Republic fell by 10 per cent to just 355, Goodbody Stockbrokers said. Photograph: Eric Luke

 

Uncertainty about building standards is thwarting the supply of new apartments, Goodbody Stockbrokers has warned.

The broker’s latest housebuilding tracker shows that while the supply of new housing units continues to grow, the number of apartments being constructed has fallen.

In the third quarter, apartment completions in the Republic fell by 10 per cent to just 355, it said. This meant apartments accounted for only 13 per cent of the State’s housing new output during the period.

“Given Ireland has the lowest share of apartments in its housing stock out of any country in the EU, Q3 projections are disappointing in this area of housing,” Goodbody said.

“Ongoing uncertainty about building standards has played a role in this trend, but viability is also the primary constraint in many parts of the country,” the broker added.

According to Goodbody, overall housing completions rose 24 per cent to 4,700 in the third quarter of 2018.

The numbers, which are based on homes issued with a building energy rating (BER) certificate, suggest 18,000 new housing units will be constructed this year.

“This remains roughly half the estimated level of annual housing demand,” Goodbody said.

“While we believe new supply will continue to grow strongly in the coming years, a significant supply deficit will remain throughout our forecast horizon to 2020,” it said.

The group’s full-year projection is slightly less than the 19,000 the Central Bank is forecasting.

Most of the new housing activity is taking place in Dublin and surrounding counties, the Goodbody report said.

In the past 12 months, it estimated that 6,566 units were completed in Dublin, representing a 33 per cent increase year on year. A further 3,631 units (an increase of 41 per cent year on year) were completed in the surrounding commuter belt counties. “Thus, the greater Dublin area accounts for 59 per cent of new supply,” it said.