Only 11k new houses due this year

Only 11,000 new housing completions are expected this year — as housing demand continues to outstrip supply.

According to a new report by Property Industry Ireland (PII) — the Ibec group representing businesses working in the property and construction sector — there was just over 2,000 housing starts in the first quarter of this year, of which 38% were one-offs.

The total level of housebuilding is forecast at 11,000 units in 2016.

The report pointed out that, while there is a substantial amount of new office supply under construction and awaiting planning in Dublin, there is a lack of Grade A office accommodation is the common thread across other urban markets.

This is putting office rents under pressure, most notably in Cork, where office rents were up by 8% in the first three months of this year.

In the region of €740 million of commercial investment transactions were recorded in the first three months of this year, just two-thirds of the corresponding level of investment in the same period last year.

PII director Dr Peter Stafford said more needs to be done to increase the number of houses being built.

“Based on leading indicators, it looks like only 11,000 new houses will be completed in Ireland in 2016. This represents another year when demand for new houses will far outstrip supply.

“While it is good news that the proportion of one-off houses is falling, more needs to be done to bring new developments through financing and planning, and on to construction,” he said.

Dr Stafford said the industry welcomes intervention by housing minister Simon Coveney in reviewing blockages and delays in the planning system and that it eagerly awaits the publication of government’s Action Plan for Housing.

Director of DKM Economic Consultants, who compiled the report, Annette Hughes, said scarcity of Grade A space in sought after locations in the commercial property sector is a common thread in the report: “This is probably what would be expected in a market lacking any signs of construction activity for almost seven years until 2015.”