A faster-than-expected recovery in construction will be marked by 22,000 homes built this year and up to 27,000 next year, according to the Banking and Payments Federation Ireland (BPFI).
The increased level of production was offset by increased demand for mortgage loans.
The Group’s most recent report on the housing sector here also highlighted a shift in construction away from the capital to other regions, particularly the Dublin commuter belt, in the wake of the pandemic.
It comes on the same day that the government is expected to release its much-anticipated Housing For All Strategy document, which promises higher funding for housing projects as well as new initiatives to increase affordability.
In its report, the BPFI said that 8,955 residential units were completed in the first half of 2021, despite building restrictions at the beginning of the year.
That was 10 percent more than the number of completions in the first half of 2020.
If the sector continues to build at a rate similar to the second half of 2020, it is likely that total completion this year can reach 22,000 units, it said.
The Central Bank of Ireland and others had forecast 20,000 home completions this year.
Based on commencement notifications, the BPFI also said it expected completions of 25,000 to 27,000 in 2022, which would be the highest level of production since the 2008 financial crisis and closer to the government’s annual housing target of 35,000.
The BPFI also highlighted a corresponding increase in mortgage approvals in its report.
The total number of permits in the first seven months of 2021 was 30,611 with a total value of around 7.6 billion euros compared to 4.7 billion euros in the previous year and 6.6 billion euros in the same period in 2019 before the pandemic.
Housing demand was boosted by the government’s purchase aid program, with around 26,000 applications received in the first seven months of 2021.
Housing activity is increasing significantly as “a healthy pipeline of housing supply and mortgage demand indicates strong growth potential,” it said.
The report also highlighted a shift in construction away from Dublin, particularly to the commuter area. The completion figures showed that Dublin accounted for around 28 percent of all house completions in the first half of 2021, but that this proportion has declined since 2017 to 39 percent.
However, the capital still has the most housing completions – around 68 percent of all apartments at the national level.
The shift in construction activity outside of Dublin is also evident in the sale of new properties, where around 36 percent of transactions in the Dublin commuter region in the first half of 2021 were new-builds, compared with around 25 percent in 2011.
In its report, the BPFI found that house price inflation accelerated back to 6.9 percent in June, compared to June 2020.
Speaking of the latest trends highlighted in the report, BPFI Chairman Brian Hayes said, “In terms of the general housing industry, despite the negative impact of the pandemic, we are seeing activity levels increasing significantly.
“The recovery in the housing sector has continued with the lifting of pandemic activity restrictions in the industry from May 2021.
“Even in the initial phase of the pandemic, the initial levels were severely impaired. On an annual basis, however, nearly 27,300 units were commissioned in the 12 months to June 2021, most of them in a 12 month period from the 12 months to October 2008, which is likely to increase the number of completions in 2022 significantly. “
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