House registrations fall 70% in August

HOUSING registrations, a key measure of new housing starts, fell 70% in August, the latest figures form HomeBond show.

In the three months to the end of August HomeBond registered only 1,800 which is 73% below the same period in 2007.

It is also the worst performance for the housing market since records began in 1997.

The bad housing figures follow yesterday’s warning from the Government that the tax take in 2008 will be up to €5 billion behind Budget forecasts for the year.

One of the major reasons for the tax revenues being dramatically off target is the serious slowdown in housing starts as buyers desert the market for a variety of reasons.

Higher interest rates and tightening credit conditions have made borrowing more difficult for consumers, who have curtailed their spending on a wide variety of goods over the past few months.

The expectation that house prices will continue to fall has also been a factor that has made builders wary of building for a market that is also oversupplied at present.

Goodbody’s Dermot O’Leary said the slump comes as builders respond to weaker demand conditions and amid a significant overhang of unsold housing stock.

One-off housing starts and local authority housing are not included in the registration figures.

“For this reason, completions will not fall to the extent that the registrations data are suggesting,” said O’Leary.

The full extent of the short fall for last month will not be known until data from Premier, the other registrations agency, is published.