By Geoff Percival
A surge in planning approvals for new house construction projects is expected to significantly boost mortgage market growth.
New CSO figures show that planning permission was granted for 8,405 houses and apartments during the first quarter of this year — up by almost 81% on the 4,650 approvals granted during the same period last year.
“The jump... shows that activity in the construction sector is clearly now ramping up aggressively. It is worth remembering, however, that activity is still at exceptionally depressed levels,” said Davy Stockbrokers’ chief economist Conall Mac Coille.
“Although some planning permissions may never come to fruition — and there is clearly a lag to activity — the pick-up clearly suggests that housing completions will increase from the 14,446 recorded in 2017; still well short of natural demographic housing demand of at least 35,000 units,” he said.
Last year’s completion total represented the lowest level of housebuilding activity since the early 1990s.
“It is also worth remembering that there were 7,672 mortgages on new homes in 2017, comprising 26% of the mortgage market. As homebuilding picks up, this will also increase mortgage transactions — helping to achieve our forecast for €14.6bn of mortgage lending by 2021,” said Mr Mac Coille.
The CSO’s much-anticipated debut stab at putting a more accurate stamp on the new housing picture, this week, actually showed that more than 85,150 new houses and apartments thought to have been built between 2011 and 2017 didn’t exist due to a misreading/miscalculation of ESB connection numbers. The true number was 63% lower at 53,566.