Property completions in the Republic increased in the first quarter of this year but growth in the number of new homes being built could slow, according to a report from Goodbody stockbrokers.
Some 4,255 residential properties were completed in the first three months of the year, a rise of 22 per cent on the same period in 2018.
And while that growth was in line with Goodbody’s forecast that 22,000 properties would be completed this year, there are signs that the growth rate could slow.
“This forecast is subject to some downside risk due to increased caution after a weaker period for the market in the second half of 2018,” said Dermot O’Leary, Goodbody chief economist.
Key to an increase in the housing figures will be growth in apartment completions, according to Mr O’Leary, who added that the build-to-rent sector would be the biggest driver of growth in apartment building.
“Without this investment, it is likely that the output in the sector would be much lower in the coming period due to viability and funding constraints.”
Since height restrictions were changed, there has been a marked increase in apartment planning applications, Mr O’Leary noted. Nevertheless, by the end of March, apartment completions accounted for 18 per cent of the total new stock on the market.
Sprawl
The Goodbody BER Housebuilding Tracker also reports evidence of sprawl towards Dublin’s commuting counties, which accounted for 57 per cent of completions in the first quarter.
The sprawl is evidenced by the percentage rise of completions in the mid-east region (35 per cent) compared to growth in Dublin completions of just 15 per cent compared with the same period of 2018.
“Given the dominance of jobs within Dublin, this is creating consequential bottlenecks in public transport and the road network. A way to address this problem is clearly investment in public transport but also a full embracing of density in the capital,” Mr O’Leary said.
Elsewhere, there was strong growth across most regions in the Republic with the mid-west and midlands recording a particularly high growth rate, albeit from a low base. Completions in the west and Border counties actually fell compared with the same period in 2018.
Just more than 18,000 properties were completed in 2018 according to data from the Central Statistics Office, representing growth of 25 per cent. But that figure falls far short of the estimated 35,000 properties that need to be built every year to deal with existing demand.
As to how that demand will be met, Mr O’Leary said that the “management of affordability, costs and a significant increase in apartment output”, would be required.
