Sunday 25 September 2016

Housing shortage set to last until at least the end of the decade - Investec

Published 20/06/2016 | 09:02

The housing crisis is set to last for four more years at least, Investec says
The housing crisis is set to last for four more years at least, Investec says

The housing shortage is set to continue until at least the end of the decade, according to analysts at Investec.

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In its latest quarterly economic monitor the specialist bank said it believed there would only be a "modest uptick" in housing completions this year.

It said Brexit is the main risk to the Irish economy this year, but that its "core case" was the that Irish economy would deliver strong growth of 5pc this year.

"The labour market has remained a key source of good news... total employment has expanded by 8.7pc since the Q313 trough, while the monthly unemployment rate has nearly halved to 7.8pc from the peak reached during the recession. Lead indicators such as the employment component of the PMIs suggest that this momentum is set to continue," Investec said.

"Encouraging signs can also be seen in terms of consumer spending, where the Retail Sales index has posted 30 successive months of annual growth in both the volume and value of sales. Despite a recent softening (linked to the deteriorating international backdrop), the consumer confidence index remains close to multi-year highs," it added.

"Monthly Exchequer Returns suggest that the public finances are on course for another year of outperformance...in the bond market, while Irish yields have moved higher in recent weeks due to concerns around the UK plebiscite, in absolute terms they remain reasonably close to record lows.

Investec said that overall the the narrative of the economy is "continued resilience...with potential storm clouds looming on the horizon."

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