Upbeat housebuilding forecast

Housebuilders will complete a record number of properties this year, according to a quarterly review from construction cost management consultant Davis Langdon PKS, but the figure will decline in 2005.

The surge in the residential property sector will help the industry grow 3.5 per cent this year, the group says in a mid-year review. Last January Davis Langdon PKS forecast growth of just 1 per cent in 2004.

Managing partner Mr Michael Webb noted the projection by economic consultants DKM of 76,000 new homes in 2004, a rise of 10 per cent on the record number of completions of 69,000 last year.

"In January, we suggested that house completions in 2004 would be similar to that achieved in 2003," said Mr Webb. "On the figures for the first half, that was clearly a pessimistic forecast and we must now suggest that 2004 will be another record year for the Irish housebuilding industry - unfortunately probably the last such year."

He said there were growing signs that the supply of new homes was beginning to meet market demand.

The upbeat assessment of the property market mirrors the findings of estate agent Douglas Newman Good, which said prices in the secondhand market in Dublin rose 4 per cent in the second quarter of the year, double the rise of the same period last year. It said house price inflation in the three months to June rose for the first time since the fourth quarter of 2002, coming in at an annualised rate of 10.8 per cent compared with 8.8 per cent in the previous quarter.

Inflation was highest at the top end of the market, with properties valued above €750,000 seeing a 15.4 per cent rise in prices, while those under €350,000 increased by just 4.6 per cent as supply and demand moved closer to equilibrium.

Douglas Newman Good said there was a 41 per cent increase in the number of properties on the market in the capital.

While the agency noted subdued activity by investors, its survey found that 23 per cent of all vendors were selling to move out of the city compared to just 13 per cent of buyers moving to Dublin from outside.