Housing sector remains 'very weak'

 

HOUSING REGISTRATIONS, an indication of new housing starts, fell 61 per cent in May from a year earlier, as construction companies cut back on new building projects due to weakening demand in the housing market.

Housing registrations dropped 64 per cent from March to May, stockbroker Merrion Capital said, citing new data from Homebond and Premier Guarantee, which register new housing developments.

Merrion said this was the second year of “significant” declines and that the housing sector remained “very weak”.

Registrations fell 64 per cent from February to April from a year earlier, and by 67 per cent from January to March. Three-month figures smooth out monthly volatility in the figures.

The housing slowdown is continuing to put financial pressure on construction firms. Two building companies were granted protection by the High Court yesterday.

The court confirmed the appointment of examiners to Co Kildare building firm Lullymore Developments, which employed 20 people at its peak, and Modern Timber Homes, which built timber-frame houses and employs 20 people in Letterkenny, Co Donegal.

Neil Hughes of Blake Hughes was confirmed examiner of Lullymore, while Ken Fennell of Kavanagh Fennell was appointed to Modern Timber Homes. Both will seek investors for the firms.

Irish Life Permanent, the State’s biggest mortgage lender, said it was “strongly positioned” to deal with the slowing housing market and pressure on earnings.

The company told investors at a Goldman Sachs conference in Berlin that its credit quality was “excellent” and that the number of mortgages in arrears at the end of April had not changed from December 2007.

It said mortgage arrears had decreased over the past five years.