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New housing supply reached a nine year high in 2018

Written by Robert McHugh, on 18th Jan 2019. Posted in Ireland

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Goodbody Stockbrokers this week released their latest BER Housebuilding Tracker which estimates that there were 18,855 new dwelling completions in Ireland in 2018. This represents annual growth of 31% for the full year and is the largest annual output since 2009.

In the fourth quarter, Goodbody estimate that 6,273 new dwellings were completed, up 37% year on year (yoy). The Goodbody analysis uses Building Energy Ratings (BER) data as a forecasting tool and is thus published roughly four weeks ahead of the official CSO data. 
 
All regions in Ireland experienced double-digit growth in 2018, albeit from low levels. The fastest annual growth was registered in the South-East (+49% yoy), but housebuilding continues to be concentrated in the Greater Dublin Area (GDA). House completions in Dublin grew by 33% in 2018 to 7,404, with completions in Dublin’s commuter belt (Mid-East) growing by 34% yoy to 3,955. 

Combined, the GDA accounted for 60% of completions in 2018, relative to population share of 43%. Viability remains the main constraint to building outside of the main urban areas of the country due to the low level of second-hand prices relative to the cost of delivery.
 
There was a rapid increase in large housing schemes in 2018, up 45% in the year to 11,469. This represents 62% of total completions. One-off housing represented a further 25% of new completions last year and has been relatively stable over recent years. Apartment completions grew in 2018 (+8%) but remained low in both absolute terms (2,428) and relative to housing output overall (13%). 

The data indicates that uncertainty around building regulations played an important role in the slow delivery of apartment stock in 2018. However, there has been significant growth in planning applications granted for planning under new guidelines. The latest data (12 months to the third quarter 2018) shows an increase of 167% yoy in planning approvals for apartments. 

According to Goodbody Stockbrokers, "Whilst it is difficult to specify the timing on these developments, there will be a substantial increase in the coming period, with many going into the growing private rented sector. It is needed; Ireland has the lowest share of apartments in its housing stock in the EU."

Source: www.businessworld.ie

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