Slow start for Irish house builds in 2015

There has been a “dramatic” slowdown in residential construction activity in the early part of this year, following significant increases in residential planning applications and construction project commencements last year.

Latest data from the independent planning research company Link2Plans show that planning applications rose by 12% and project commencements were up by 30% last year.

Much of the increase in activity occured in the first quarter of 2014, ahead of the introduction of new building regulations. As a result, growth in project commencements fell from 66% to 30% from the mid-way point of last year.

“Despite the slowdown in growth in the second half of the year, 2014 was a very positive year for the residential construction sector in Ireland,” said Danny O’Shea, the managing director of Link2Plans.

“This recovery in the sector, which began in the middle of 2013, is being driven by activity in Dublin and Cork which, combined, accounted for 42% of all planning applications and 35% of commencements in 2014.

“The positive sentiment in the residential construction sector, which was initially only felt in the major urban areas, is now beginning to radiate across the entire country, with 15 counties recording a rise in the number of planning applications when compared to the same period in 2013.”

However, while confidence remains strong, Link2Plans is forecasting a tougher year for the residential market in 2015.

“Even though 2014 has seen growth across the sector, it is best described as a year of two halves; the first showing huge promise and the second slowing down to a trickle,” said Mr O’Shea.

He said the main driver of growth last year was “a combination of pent-up demand and an increased confidence in the sector”.

The largest year-on-year gains for project commencements in 2014 took place in: n Westmeath (+67%); n Cork (+88%); n Donegal (+50%); n and Galway (+45%).

Dublin recorded a year-on-year increase of 30%.

“While confidence in the sector remains strong, the data from the National Housing Construction Index indicates that 2015 may present a more turbulent year for the residential construction sector,” said Mr O’Shea.