Housing crisis: 'End of decade before we have enough houses to meet demand' - report
The Irish housing market is two years into sustainable recovery
IT could be then end of the decade before we have enough houses to meet demand, Goodbody Stockbrokers said in a new report.
The report added that the housing market here is two years into a "sustainable recovery."
Housing completions grew for the first time in eight years in 2014.
However, at 11,000 units, supply remains 88pc below peak levels and, more importantly, is well below our estimated 30,000 medium-term demand forecast.
"It may take until the end of the decade for supply to match expected household demand, given development and planning lags, construction sector capacity constraints and limited financing," said Dermot O'Leary, chief economist at Goodbody Stockbrokers.
"The supply shortages are most acute in the greater Dublin area."
He added that new Central Bank mortgage restrictions will cause a moderation in new mortgage lending, but this will not occur until the second half of 2015. We now expect gross lending growth of 29% in 2015, followed by 11pc in 2016.
"The measures are aimed at preventing a repeat of the credit-fuelled housing bubble of the 2000s, and are something that we welcome."
He said that annual gross lending of €8bn is a reasonable target for a "normal" level of lending (c.€4bn currently), but this will not be achieved until later in the decade.
Prices should reflect underlying fundamentals but sometimes become detached due to expectations, both on the upside and the downside. Ireland has experienced both in the past decade.
"We believe that prices right now are close to fair-value, and will see strong, albeit moderating growth over the next two years (7pc in 2015, 5pc in 2016)," he said.
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