By Eamon Quinn
House building is at “unsustainable and incredibly low levels” and is coming nowhere close to meeting demand, according to a new analysis by Goodbody’s Dermot O’Leary.
And the chief economist predicts house prices will continue to rise over the next two years.
Mr O’Leary has long championed an alternative method of measuring new house builds using Building Energy Rating, or BER certificates, because he contends the much-used ESB connection figures wildly overstate the true number of home completions. The controversy has led to an official review.
Mr O’Leary said that based on BER certificates, that only up to 16,000 new homes will be built this year. Although that is up sharply from the 11,000 units completed last year, it is still far short of the 35,000 annual target he estimates will be required to start meeting demand.
He said the low level of home completions was a legacy of the crash but current new builds were at “unsustainable and incredibly low levels”, which will mean house prices will grow 9% this year and by 6% in 2019.
There is still a big gap between the completions suggested by the BER and ESB figures.
Counting BER certificates, there were 3,223 new homes built in the first four months of the year, up by almost 36% from a year earlier, while the ESB connection numbers suggest 3,158 were completed in the first two months alone, Mr O’Leary said.
The BER figures show that new apartment builds have fallen, which raises implications for urban sprawl, he said.
ESB electricity connections, which officials have long favoured as a proxy for new home completions, suggest that 24,000 new units will be built this year, he said.
“The Central Statistics Office has been given the responsibility for the management of the housing supply statistics… We hope that this will bring long overdue clarity to this important issue.” the economist said.