Housing completions likely to exceed 32,000 this year, report finds

Almost 31,600 new houses have been built in the 12 months ended September, up from about 27,500 in the 12 months previous, according to a report by lobby group Banking & Payments Federation Ireland (BPFI).

The group’s latest Housing Market Monitor, which covers the third quarter, suggests that while the Republic’s housing supply is expected to increase in 2024, affordability issues remain as construction costs continue to rise.

The group’s chief executive Brian Hayes argued that a 17 per cent increase in housing starts “points to healthy pipeline for completions in 2024″, likely to exceed 32,000 units.

“At the beginning of the year, it was expected that housing and mortgage demand could be negatively affected in 2023 due to the fall in the purchasing power of households caused by higher housing and general living costs, as well as the future uncertainty in the wider economy,” he said.

“However, mortgage activity has remained resilient with mortgage approval values reaching €14.7 billion in the 12 months ending October with nearly 52,000 approvals.

“While drawdown volumes declined by 22 per cent year on year in Q3 2023, this was mainly due to the significant decline in switching activity and in fact, first-time buyers drew down over 7,000 mortgages during the quarter, the highest Q3 volume since 2007.”

The report also suggests increases in construction costs risk further affordability issues as home prices increase faster than incomes.

“While the increase in housing output has helped to moderate average annual housing price inflation with average residential property prices increasing by 1.4 per cent in the 12 months to September compared with [a] 10.8 per cent annual increase in September 2022, construction costs in Ireland have increased by nearly 23 per cent between the end of 2019 and the third quarter of 2023,” said Mr Hayes.

Are cheaper energy prices finally on the way for Irish consumers?

“Given that average home prices have increased faster than the incomes of potential home buyers in the past few years, looking forward, it will be important to monitor cost challenges in the sector while building more homes so that better affordability can be provided for potential home buyers.”

Almost 8,500 new dwellings were completed in the quarter, which was up 14.4 per cent on the same period last year.

There were more than 3,600 scheme house completions, which represents an increase of 1.5 per cent year-on-year. Scheme houses accounted for 42.9 per cent of completions in the quarter.

Dublin accounted for about 42.2 per cent of all completions and 80.8 per cent of apartment completions. Munster and the Dublin commuter region accounted for about 16.6 per cent and 19.7 per cent of completions, respectively.

While the number of apartment completions in Dublin rose by 66.6 per cent year-on-year to 2,727, scheme house completions in the region fell by 15.2 per cent to 777.

The increase in scheme completion numbers was driven mainly by a 92.6 per cent jump in Ulster to 260 units.

The number of residential units granted planning permission rose by 43.3 per cent year-on-year to 9,662.

More than 4,800 apartments were granted planning permission, about 50 per cent of all units and 104.2 per cent more than in the same period last year.

Dublin accounted of 64.1 per cent of apartments nationwide and 17.8 per cent of houses. Dublin City Council alone accounted for 47.3 per cent of all apartments.

The number of dwelling units approved in Kildare decreased by more than 400 year-on-year while the units approved in Limerick, Louth, Meath and Westmeath increased by more than 300.

Residential property price inflation increased, with prices up by 1.4 per cent in the 12 months to September, compared with an increase of 10.7 per cent in the year to September 2022.

Prices for new dwellings were up 10.4 per cent year on year, while prices of existing dwellings were 1 per cent lower.


This website uses cookies. By continuing to use this site, you accept our use of cookies.