House building remains substantially below official estimates, but there was significant growth during September, according to an analysis by Goodbody.
The Goodbody BER Housebuilding Tracker, which is based on building energy ratings, was formed following increasing doubts about the accuracy of official statistics. “Our analysis suggests that these doubts are well-founded in terms of the level of activity at this point, but there is exceptionally strong growth now in train,” noted Goodbody’s latest report.
It said there were 1,049 residential units completed in September 2017, which represents 86 per cent year-on-year growth. It was the first month in the series, dating back to January 2013, where the level of completions exceeded 1,000 units. In the year to date, 6,447 units have been completed, which represents a year-on-year increase of 78 per cent. “Alternative housebuilding indicators, such as those based on electricity connections, suggest a much higher level of output (11,886 in the year to August), but we believe our measure provides a more accurate gauge,” said the report.
Semi-detached homes remain the most popular type of new home built in Ireland, accounting for 40 per cent of new completions in the year to date. Terraced homes accounted for 23 per cent of the new build, followed by detached units (21 per cent). Apartments accounted for 15 per cent of new builds, amounting to less than 1,000 in the year to date. As a comparison, the electricity connections data suggests that there were 1,917 units completed in the year to August. The building energy ratings analysis suggests that apartment building is concentrated almost exclusively in the capital (94 per cent of the total).
The current high costs of apartment delivery, such as those highlighted in a recent report by the Society of Chartered Surveyors Ireland on the topic, were described by Goodbody as “a major inhibitor” of new apartment supply, despite a “glaring shortage”. Some 72 per cent of the new homes completed were in the Greater Dublin Area (Dublin, Wicklow, Meath and Kildare) in the year to date.
This is similar to the proportions seen in recent years, but well above the share of the population in this region of the country (40 per cent). All regions, however, are now experiencing “significant house building growth”. In this month’s budget, the Government announced further measures to increase the supply of housing, such as an increased levy on unused sites and a new house building finance agency. “These will take time to implement, but further actions to reduce the costs of building are also required,” added the report.