New home registrations at their lowest level since figures began
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THE total number of housing registrations in August was down over 71pc year-on-year, with three-month figures to the end of last month showing the lowest levels since the figures began in 1995. The figures, from registration agencies Homebond and Premier Guarantee, come as the Government moves forward the date for Budget 2009 to October 14, which some market watchers feel will include a stimulus for the housing market.
"We expect that a package of measures will be announced to boost transactions in the property market," said Rossa White, chief economist at Davy Stockbrokers. "One stimuli would be the expansion of the Housing Finance Agency's balance sheet for a temporary period as one of the main issues in the market is limited availability of credit.
It currently only covers affordable housing." He added that incentives also need to be added on the supply side and the temporary re-introduction of first-time buyers' grants could also boost the market."
Decline
According to the housing registration figures, the three-month rolling measure, from June to August, showed a 73.9pc drop in August, compared with 70pc in July and 58.8pc in June. According to Merrion Capital's Killian Jones, the three-month measure is the best figure to focus on as it eliminates monthly volatility/seasonality and should provide a truer sense of when the market is beginning to stabalise.
He added that the decline compared with two years ago is currently significant and is down 87.8pc compared with the equivalent three-month period in 2006. "Overall, we are still in a very weak registration environment," he added.
According to Mr White, the figures show that housing starts were running at an annualised rate of 14,950 seasonally adjusted. "Builders really have curtailed supply thanks to the glut of unsold completed stock on the market and tighter credit availability," he said.
Crucially, house completions need to drop below the rate of housing starts to reduce the unsold stock. Housing starts are now more aligned with housing sales, but it takes about 12 months for housing starts to become completed stock."John Sheehan, an analyst at NCB Stockbrokers, noted that given the laggard nature of activity, this points to weakness in the Irish residential activity through 2008 and 2009 with recovery at the earliest in 2010.
Following the figures, NCB Stockbrokers said its forecast of 30,000 completions in 2009 may prove too optimistic, following an estimated 48,000 units in 2008.
Last month the Construction Industry Federation (CIF) revised down its expectation for housing completions for the first time this year for the 12 months ended 2009
- Ailish O'Hora Business News Editor
