12% drop in new home completions puts Simon Harris pledge under threat

Dermot O'Leary said Goodbody was sticking to its forecast that 35,000 new housing units would be built this year, the highest number since the banking and property crash. 

The pledge by Simon Harris to build 250,000 new homes over the next five years appears to have got off to a shaky start after official figures unexpectedly showed that the number of new houses completed in the first three months this year dropped by 12%. 

Only 5,800 dwellings were completed in the quarter after a marked decline in the number of new apartment completions in the Dublin region, according to the Central Statistics Office figures. 

The drop was largely driven by a more than 25% decrease in new completions in Dublin, with new apartments largely located in urban areas falling by more than a third. More than three-quarters of apartment completions in the last three months were in the Dublin region, the CSO said, with over 93% of apartment completions in Dublin City.

The number of completions fell in six of the eight regions of the Republic compared with the last three months of 2023. However, there were small increases in completions in the Midlands and Southeast, according to the figures.  

The significant fall suggests that the new Taoiseach's pledge to oversee the building of 250,000 new homes over the next five years is already under threat. 

Many analysts had hailed figures showing a large rise in housing starts and in planning permissions as evidence that builders could deliver at least 30,000 new homes this year, and make a start into addressing the huge shortfalls of recent years that were made worse by the disruptions and escalating costs during the years of the pandemic. 

However, Dermot O'Leary, chief economist at Goodbody, said that poor weather and timing issues may explain the unexpectedly low number of housing completions in recent months, at a time when other indicators point to a sharp rise in house building activity. "I don't think it indicates a change in the trend at this time," Mr O'Leary said.   

The CSO figures show there were 3,038 scheme dwelling completions from January to March, and 1,200 single dwelling completions. More than half of completions were scheme dwellings, with over 27% being apartments and almost 21% single dwellings, the CSO said. 

Mr O'Leary said Goodbody was sticking to its forecast that 35,000 new housing units would be built this year, the highest number since the banking and property crash. 

The Economic and Social Research Institute had warned in January that the Government would need to lift its targets to build new homes to take into account a growing economy, a general increase in the population, and to accommodate Ukrainian refugees.

Ian Lawlor, managing director at Lotus Investment Group, which provides finance to housebuilders, said that the latest housing completion numbers were "disappointing". It was "imperative that more supply comes on board", Mr Lawlor said, for there to be any chance that house price inflation would ease.

"There needs to be an exponential increase in the number of houses being built so that young people here have a chance of owning their own home and so that the rate of house price growth is kept in check," he said. 

Additional reporting Eamon Quinn