Tuesday 19 February 2019

Number of new homes at lowest level for five years

Fall in house prices worst in Dublin

Paul Melia

THE number of new homes being built has fallen to the lowest level in five years.

But despite doomsayers predicting a crash in house prices, the cost of a new home has fallen by just 3pc in the first three months of this year compared with the same period in 2007.

The Department of the Environment says the average price of a new home is now €311,113 -- a drop of 3.1pc compared with last year. The average cost of a second-hand home has fallen by 5.4pc to €359,111.

But steep declines have been recorded in the capital. In Dublin, the average new house costs €397,697, down 4.8pc; with a second-hand house or apartment coming in at €462,475 -- a drop of 10.4pc.

The Quarterly Housing statistics, released yesterday, also show the number of new homes coming on stream has plummeted to the lowest level in five years.

Just 14,010 units were completed in the first three months of the year -- the steepest drop recorded since the same period in 2003 when 13,709 homes came on stream.

Some 23,569 homes were completed up to the end of May, preliminary figures show.

The analysis will come as no surprise, confirming the dramatic slowdown in the housing market, and showing that output will remain low for the foreseeable future. Just 7,713 new housing units were started in the first three months of the year -- a decrease of 54pc on last year when work began on 16,855 homes.

Work has begun on 1,483 in Dublin, compared with 3,147 last year.

There were also sharp drops in Cork city and county (1,035, down from 2,021), Galway city and county (475, down from 1,160), Limerick city and county (345, down from 695) and Waterford city and county (173, down from 378).

Lowest output is in Drogheda where work began on just five houses compared with 47 last year, and eight starts were recorded in Athlone compared with 90 in 2007.

Just two local authorities buck the trend -- Limerick City and South Dublin have seen an increase in new house starts so far this year.

The Construction Industry Federation said in a statement that the fall in house prices reflected "more realistic" pricing in relation to the market. The slowdown in output would probably mean prices were unlikely to fall much further.

But the figures also show that the gloomy economic outlook has weakened the public's appetite for investing in housing. The number of people getting mortgage approval has declined, with just 15,358 loans worth €4.4bn approved for house purchases -- a drop of 37.6pc in volume and 31.5pc in value.

Just €3.7bn was spent buying homes in the first three months of this year, with 13,320 mortgages drawn down.

This represents a drop of 36.6pc in the number of people availing of an offer, and a drop of almost 30pc in value.

On a positive note, the number of homes being provided to the least-well off has increased. The figures also show that 976 affordable homes were provided -- double the number in the same period last year

Some 1,531 social houses were completed or acquired in the first quarter, with a further 287 new units acquired under the Rental Accommodation Scheme.

Developers also handed over 766 units, up 73pc, as part of their Part V obligations.

This requires them to give up to 20pc of all homes in a new estate, or cash or land in lieu, to the local authority. Another 5,753 units are in progress under Part V.

"I am pleased to see the Government's efforts to increase the delivery of social and affordable housing are paying dividends, due in large measure to the additional investment made available under the National Development Plan," Housing Minister Michael Finneran said.

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