Construction shares rise but Covid set to dent house completions this year

Construction shares rise but Covid set to dent house completions this year

The number of new houses built this year could drop by more than 5,000 due to construction disruptions caused by the Covid-19 outbreak.

That is according to Ibec-affiliated body Property Industry Ireland (PII), which sees house completions totalling only 16,000 in 2020.

That would be down from an official figure of 21,500 for 2019 and also considerably down on a forecast range of 19,000-25,000 new builds for this year.

It would also come about despite a strong start to the year, when – according to the CSO – new home completions, covering houses and apartments, shot up by over 17%.

“Before the impact of the Covid-19 virus on the economy and society it would appear that homebuilding had been recovering,” said PII director David Duffy.

“Given the closure of the majority of sites in response to measures to restrict the spread of the virus we expect a marked contraction in output in quarter 2. Ongoing distancing and health and safety measures will mean output is likely to be lower than previously expected for the rest of the year,” he said.

Nevertheless, shares in Irish construction firms surged ahead of work resuming on building sites on May 18. Shares in Cairn Homes rose by 4.4%, while Abbey and Glenveagh Properties saw respective share price jumps of 2.4% and almost 9%.

Abbey and Glenveagh both produced better-than-expected trading updates.

Glenveagh said it will reopen 80% of its sites and will focus on finishing homes already close to completion. It said cancellation levels have been low and it has continued to take sales remotely during the lockdown. It said it has 570 units sold, signed or reserved – up from 475 in February.

Abbey said turnover for the 12 months to the end of April fell by 20%, but forward orders exceed 300 homes. It also said it closed its financial year in a net cash position of €70m.

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