By Eamon Quinn
Housing supply is growing but will fall far short of meeting the high level of demand over the next two years, according to analysis by Goodbody chief economist Dermot O’Leary.
He forecasts a sizeable pickup in new house completions from an estimated 18,000 this year to 25,000 units in 2020, but new supply will fall short of an estimated 35,000 annual units that are needed to start meeting demand.
“While we believe new supply will continue to grow strongly in the coming years, a significant supply deficit will remain throughout our forecast horizon to 2020,” he said. Mr O’Leary reiterated his forecasts that house price inflation across the state will fall to 9% at the end the year, and then ease further to 6% next year, in response to the rise in supply.
His forecasts for new house builds are based on building energy ratings, or Ber, which he says provide an early indicator to the trends in the new authoritative statistics provided by the CSO on new house builds.
The CSO started its new statistics series because former estimates used by officials based on electricity connections overstated the number of new houses under construction.
“On the basis of these trends, we are forecasting circa 18,000 new completions in 2018, roughly half the estimated level of annual housing demand,” he said.
Goodbody forecast almost 9,560 units were completed in the greater Dublin region, which includes the mid-east area, in the last year, which accounted for 59% of all new house units in the period.
In the southwest, it estimated just over 1,960 units were completed in that time. Construction of apartments “remains disappointingly low despite”, the broker said.