New-home construction up 36% but much more needed

The construction of new homes was up by a third in the 12 months up to June, but a substantial increase in building activity is needed, writes Joe Leogue.

The GeoView report is published by GeoDirectory, a database of commercial and residential buildings compiled and managed by An Post and Ordnance Survey Ireland.

Some 5,966 buildings were classified as under construction in the GeoDirectory database in June, compared with 4,375 in June 2016.

However, just a quarter of all new construction activity is in Dublin, the report said.

Dara Keogh, CEO, GeoDirectory, said: “We can see that there has been a sharp increase in construction levels, 36% year-on-year.

“This, however, is focused on Dublin, where the property market is under severe pressure to keep up with demand.

“This pressure on the market is again evident when we look at vacancy rates.”

However, the GeoView report’s findings on the number of vacant properties in the country is much lower than the number stated by the 2016 Census.

The census reported a vacant stock of 183,312 dwellings, which is 12.3% of all stock as of April 2016.

However, the GeoDirectory report put this figure at 96,243, or 4.9% of the total stock.

“By evaluating how GeoDirectory defines a vacant property, we have reached a figure of 96,243 vacant address points; this is almost 50% lower than previously reported and we believe this is much closer to the true figure,” Mr Keogh said.

While Geodirectory said that census enumerators were instructed to look for signs that the dwelling was not occupied, when seeking to identify vacant dwellings, its report uses other criteria, including whether or not the property receives post, and it excludes holiday homes.

It found that counties in the west of Ireland had the highest vacancy rates, led by Leitrim (16.61%), Roscommon (13.88%), and Mayo (13.06%).

Dublin (0.89%), and the surrounding counties of Kildare (1.99%), Meath (3.35%), Wicklow (2.65%), and Louth (3.61%) had the lowest percentages of vacant units.

The turnover of residential stock was 43,767 transactions in the year to May, 2017, but the vast majority of these were secondhand homes.

“As of June 2017, there were 1,967,698 residential dwellings across the Republic of Ireland,” said Annette Hughes, director of DKM Economic Consultants.

“With 43,767 property transactions in the year, there was a turnover rate of 2.22%; 90% of the properties transacted were second-hand dwellings.

“This, along with increasing property prices, suggests that a substantial increase in construction activity is very much needed.”#

This article first appeared on the Irish Examiner.

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