First quarter puts Ireland on track for 21,000 units
The number of new homes built in the first three months of the year came in higher than expected despite the restrictions on construction under Level 5 lockdown rules, according to Goodbody’s BER Housing Tracker.
The quarterly report, which measures housing output by building energy rating certificates, found that about 4,000 homes were completed in the first quarter, putting Ireland on track to build 21,000 units by the end of the year.
That figure is roughly equal to the number that were built in 2020, a year that was also disrupted by pandemic restrictions but nonetheless finished strong.
Housing output was down 20pc year on year on Q1, but that compared favourably to the first lockdown period in Q2 2020, when home completions fell 33pc versus the same period in 2019.
However, the number of new homes being built now is still far off the 35,000 per year of estimated demand in the market, according to Goodbody chief economist Dermot O’Leary.
Nonetheless, the early 2021 numbers put a positive gloss on the gloomy commentary from the Construction Industry Federation (CIF), which estimated that the post-Christmas lockdown would result in a shortfall of 800 homes per week.
Builders were back on all residential sites this month as the Government began to ease Covid-19 restrictions on construction.
Yet the impact of freezing the building industry for several months is expected to be felt for several more years as supply will remain constrained, notwithstanding the surprisingly strong housing numbers in the first three months of the year, according to Goodbody.
“The reduction in housing starts will result in a flatter path for completions over the coming years, with an expected increase to 23,000 units in 2022 heavily reliant on completions of apartments currently in construction in Dublin,” said Mr O’Leary. “This still leaves output well below our estimated demand levels of 35,000 per annum.”
Housing commencements fell by 50pc in the three months to the end of February – an impediment to a quick bounceback even as the economy reopens.
Dublin was the worst performing region overall with a sharp drop in new homes built of 39pc.
The border counties, midlands and south-west had the best output figures over the last 12 months.
In terms of housing type, apartment construction and housing schemes took a bigger hit than single family dwellings.
The number of new apartments fell by 25pc while housing scheme output dropped 21pc. Single house completions, representing a quarter of total housing output in Q1, fell by just 8pc.
Goodbody said fragmentation in the homebuilding sector remains a problem, with even the biggest housebuilders lacking the scale to achieve higher output.