The number of housing units started this year has hit almost 30,000 as builders rush to meet surging demand and try to make up for lost activity during the lockdowns.
The figures suggest that supply is finally beginning to respond to demand.
The total number of units started in the year to August is 29,565, with 19,000 of these outside Dublin, according to figures from the Department of Housing obtained by Davy Stockbrokers.
However, there is still an under-supply, which is likely to mean pressure on property prices will remain.
Economist Conall Mac Coille said this meant housing starts were now higher than they were in pre-pandemic 2019.
He said it suggested that supply was finally responding to massive demand for new homes.
“Thankfully, the latest housing starts data for August suggest that supply is finally beginning to respond, with 2,162 starts in the month bringing the annual total to 29,565 – of which 19,000 were outside Dublin,” he wrote in a note to investors.
Builders have to inform local authorities a month in advance of when they are about to start construction, and usually cannot delay the process once they have done this.
In 2019, before the pandemic, some 26,500 completion notices were issued.
At the height of the lockdowns last year, some estimates had put the number of housing units to be built this year as low as 13,000.
The number fell back to 21,700 due to the severity of the coronavirus outbreak and the lockdowns imposed.
But builders have been rushing to get shovels into the ground to meet surging demand.
Now in the year to August, close to 30,000 commencement notices have been issued.
And the fact that close to 20,000 of these were for outside Dublin implied that many of them were for houses, Mr Mac Coille said.
When it comes to completions, there were 21,100 in 2019. This fell to 20,500 last year.
It was expected that there would be 22,000 housing units completed this year, the Davy economist said.
By next year, completions could hit 30,000. It took longer to complete apartments than houses, he said.
“So next year could be a big year for completions with around 30,000,” he said.
Last year, planning permission for 45,000 units was granted, of which 60pc were for apartments.
They were largely in Dublin and targeted at the private rented sector.
Strong demand means that asking prices for homes are 9pc higher than a year ago, with prices outside of Dublin accelerating faster than in the capital.
Mr Mac Coille said there were just short of 16,000 residential property transactions in three months to September, with an average value of €346,000.
This suggests transaction volumes during the summer of 2021 were almost exactly in line with pre-pandemic 2019 levels.
There are currently 12,900 properties listed for sale on MyHome, which is just 0.6pc of Ireland’s stock of just over two million homes.
This is down almost a third on the year, and well below pre-pandemic levels of 20,000.
The economist said that Covid-19 had tightened the housing market, with many vendors taking the decision not to put their homes on the market.
A shortage of housing supply meant that close to 25pc of mortgage approvals were now failing to translate into drawdowns.