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Wednesday 16 August 2017

Level of house building hits a three-year high as strategy bears fruit

(Stock photo)
(Stock photo)
Paul Melia

Paul Melia

The number of homes under construction has risen to its highest monthly level in more than three years, new figures show.

Local authorities were told that works had begun on 2,053 houses and apartments in May, which is the highest monthly return since March 2014, the Department of Housing said.

Data to be published this week suggests the Government's 'Rebuilding Ireland' strategy appears to be bearing fruit.

The number of homes connected to the ESB network, which is considered a good indicator of output, is up 19pc year on year to 16,340 units.

"Some 7,047 of these homes are in the Greater Dublin Area, the four Dublin local authority areas plus Kildare, Meath and Wicklow, which have seen a 33pc increase in ESB connections in the past 12 months," a spokesman said.

In the same period, work began on 15,579 units, a rise of 42pc, while the number of homes granted planning permission is up 39pc to 17,934.

Crucially, some 75pc of these permissions related to multi- unit housing developments. These homes will be offered for sale on the open market and will help meet demand from buyers and renters.

Read More: 'We spend 60pc of income on rent - it's mad'

While there are positive signs of recovery, housing output is still way below the level needed to meet demand.

Housing experts suggest at least 25,000 units a year are required to dampen house price inflation and rising rents, but the real figure is likely to be closer to 35,000 given the lack of new home construction over recent years.

Last year, just under 15,000 units were completed. In 2015, it was just over 12,600, while in 2014, 11,000 were finished. That suggests a shortfall of 36,000 units over the last three years.

The Central Statistics Office (CSO) will tomorrow publish its latest residential property price index, which is expected to show prices are continuing to rise as the construction industry ramps-up to meet demand.

Price inflation has been particularly acute in Dublin and surrounding counties, where demand for homes is highest. The Department of Housing said that figures for the first five months of this year showed some positive signs.

Work started on 5,856 homes in the capital, up 11pc. Across the Greater Dublin Area, some 9,053 units are under construction, up 29pc.

Irish Independent

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