Housing starts top 25,000 in first six months of 2004

There was further evidence yesterday that the number of new homes being built in the State is heading for a record, with the publication of figures showing new housing starts topped 25,000 in the first six months of the year.

The number of starts registered with Homebond, the building industry warranty scheme, was 26,454 in the six months to the end of June. This was an 8 per cent increase on 2003, and the highest number in the past five years.

Dublin topped the list, with 7,265 registrations - an increase of 14 per cent on last year. Cork took second place with a 4.3 per cent jump to 2,790, Kildare and Limerick followed with 1,272 and 1,269 respectively. Monaghan had the lowest number of registrations in the period, with 47.

The figures, published in an industry journal, show that apartments are making up a growing share of new housing stock. Of the total, they accounted for 7,986, or 30 per cent. This is the highest share and number recorded in the past five years. Since 1999, the proportion of new apartment registrations has grown from 21 per cent.

The news follows recent predictions that the number of new houses likely to be built this year could top 70,000. Bank of Ireland group chief economist Dr Dan McLaughlin suggested this week that it could be as high as 75,000.

Yesterday, Goodbody Stockbrokers analyst Mr Robert Eason said the figures pointed to continued strength in the Irish residential market and another record year for completions.

Reacting to the news yesterday, a number of economists predicted that housebuilding had reached a peak.

"Our own view continues to be that we are very near the peak in housing registrations," said Merrion Stockbrokers' Mr John Mattimoe. "However, we remain of the view that there is more likely to be a gradual, orderly slowdown in activity rather than a sudden drop off."

DKM economist Mr Colm McCarthy said the predicted tightening in EU monetary policy would help to put the brakes on the boom. He forecast that, by next June, basic retail mortgage rates would be at 4 per cent.