Quarter of mortgage approvals 'struggle to secure new home purchase'           

Davy said €11.4bn in mortgage approvals in the 12 months to August 21 could result in only €8.4bn worth of drawdowns.

The Economic and Social Research Institute forecasts that 21,000 new homes will be completed this year.

Close to one-quarter of mortgage approvals are now struggling to secure a property, but housing starts are finally responding, according to broker Davy.

The broker said it has based its analysis on the property register data and on the industry's mortgage approval figures.

It said there was "clear" evidence of excess demand for housing as this summer transactions match the pre-pandemic level of 2019.     

It said €11.4bn in mortgage approvals for 44,400 would-be-buyers in the 12 months to August 21, could result in only €8.4bn worth of mortgage drawdowns, or 33,800 loans, to the end of the third quarter. 

"Close to one-quarter of mortgage approvals are now struggling to secure a property," the broker said. 

Thankfully, the latest housing starts data for August suggest that supply is finally beginning to respond, with 2,162 starts on the month, bringing the annual total to 29,565 — of which 19,000 were outside Dublin," according to the broker's analysis.

The Economic and Social Research Institute has forecast that 21,000 new homes will be completed this year and 26,000 units built in 2022, as all Covid restrictions are lifted. 

It expects the number to rise in the following years amid the Government's investment plans. In its new forecasts, the Central Bank warned that global shortages could affect construction.