Goodbody Stockbrokers has today released its latest BER Housebuilding Tracker. The data shows that housing completions in Ireland grew strongly in the third quarter. While sales in key first-time buyer price brackets continue to grow, the higher end of the market remains weak.
Housing completions grew by 34% year on year (yoy) to 6,200 in the third quarter. This takes the total in the year to date to 15,400, with the possibility that the full year outturn may modestly exceed Goodbody's forecast of 21,000 units.
However, with unsold stock rising due to lagging private new home sales, the risks remain tilted to the downside to Goodbody's completions forecast of 24,000 for 2020.
A surge in housebuilding in Dublin’s commuter belt contributed most to the growth in new dwellings. In the third quarter, new dwelling completions grew by 57% yoy in the Dublin’s commuter counties. In contrast, completions grew by just 9% yoy in Dublin in the third quarter. In the first three quarters of the year, completions grew by 44% in the Mid-East but were up just 4% in Dublin. Outside of the capital, completions grew strongly in the West (+73%), the Mid-West (+43%) and the South-West (+24% yoy).
The Tracker shows that apartments represent a growing share of residential completions. In the third quarter, Goodbody estimate that apartment completions grew by 78% yoy to 1,100 units. Given the costs of apartment delivery, viability appears only to be achieved in the higher-priced market of Dublin, resulting in a sprawl of lower density housing outside the capital.
Separate analysis of housing transactions points to strength at the more affordable parts of the market and weakness at price points above €500K. New home sales grew by 1% in the first nine months of 2019, with sales above €500K down by 17% (-24% in Dublin) and sales below €500K up by 4% (-11% in Dublin).
According to Goodbody Stockbrokers, "The PLCs continue to outperform the rest of the market in terms of sales achieved in the year to date. This is a function of the larger proportion of its homes being in the lower price brackets, a function of their land banks. In the year to date, the share of new homes sold below €500k for the market ex. top 10 was 75%."
They added, "For the top ten builders in Dublin, excluding the PLCs, 85% was sold for below €500K. 94% of Glenveagh’s sales were for below €500K while 58% of Cairn’s sales were for less than €500K in Dublin. However, this rises to 95% when the one-off PRS sale of Hanover Quay is excluded."
Source: www.businessworld.ie
