More homes being built, but increase may be hard to maintain
The number of new homes being built is increasing as the residential sector enjoys a share of the construction industry revival that has also seen an exceptional spike in infrastructure projects.
Residential output has doubled since 2015 and grew 8.3pc in the last three months alone, according to latest Central Statistics Office figures.
Civil engineering, such as transport, telecommunications, energy and sanitation projects, increased by an even more impressive 21pc over the summer months and a remarkable 56pc when compared with the same period last year.
Non-residential building, such as commercial developments and public facilities, is recovering more slowly, growing by just 1.8pc year on year and taking a 3.1pc dip from April to June compared to the first three months of the year.
Altogether, output from the construction industry, which employs 150,000 people, increased by 11.3pc in a year.
The value of that output outstripped its volume, growing by 13.6pc in the same period.
Activity is still well below the 2006 peak, however, and analysts warn that the current pace may not continue.
Eamon Hetherington, of GPD Property Developers, said the momentum in the new homes market would falter unless restrictions on new mortgages were relaxed.
"We will begin to see a slowdown in output as the new homes market appears to be reaching equilibrium with developers supplying as many homes as they can currently sell," he said.
"The key issue is that many people who have demonstrated their consistent ability to pay €1,500-plus in rent over the last couple of years are prevented from qualifying for a monthly mortgage of less than this on a comparable property."
He said average rents were 37pc higher than the average mortgage payment in Dublin and 47pc higher in Cork.
"The economics of this simply don't add up," he added.
"There have been many complaints that developers are building to rent rather than to sell, but with so few individuals or couples qualifying for a mortgage under the current rules, these developers would appear to have little choice."
Ronan Dunphy, economist with Investec Ireland, also urged caution on what otherwise looks to be a runaway civil engineering sector.
"The latest data suggests that the health of the sector may be turning upwards," he said, adding that figures from previous quarters had shown a volatility that should be taken into account.
If residential output continues at its current pace, the number of individual units built will exceed last year's total of just over 18,000, but that is still below the Government's minimum annual target of 25,000.
A move toward higher density developments to boost housing output appears to be taking effect. New dwelling completions reported by the CSO in recent weeks show that of the 4,920 completed in the second quarter of this year, 58pc were in housing estates, 27pc were single houses and 15pc apartments.
In the same period in 2015, when residential output was half its current level, estates accounted for 46pc of homes, 45pc were single houses and 9pc apartments.