Growth in home-building activity slowed to the lowest rate since the fourth quarter of 2013 in the first quarter of the year, according to Goodbody Analytics’ latest BER Tracker. New dwelling completions grew by 6% year on year (yoy) (+18% yoy in Q4) to 4,500 units.
This took the rolling four quarter total to 21,500. Given that construction sites were only forced to close at the very end of March, the data relate to activity prior to the lockdown measures.
The Tracker shows that by region, new units fell 4% yoy in the Greater Dublin Area (Dublin : +2% yoy, Mid-East: - 12% yoy) while growth was led by the West (+63% yoy), the Midlands (+56% yoy) and the Mid-West (+18% yoy), although these are all from much lower bases. By type, apartment completions grew by 39% yoy to c.800 units in the first quarter of 2020. This took the total in the last twelve months to c.4,000, representing c.18% of total residential output.
Despite the rapid growth, this remains as one of the lowest shares in Europe; according to Euroconstruct, apartments will represent 60% of new residential completions in 2020 in the EU. Given the current shutdown, coupled with expected social distancing measures when sites reopen and the changed economic environment, Goodbody expect a significant fall in output for the rest of the year, with output for the full year now likely to be below 2018 levels of 18K.
According to Goodbody Stockbrokers, "Meanwhile, on the demand side, the backdrop will be impacted negatively in light of the spread of COVID-19 and is likely to result in a reassessment of supply plans for some developers."
Source: www.businessworld.ie