House price inflation may slow this year

HAS a corner been turned in the supply of new homes?

Latest figures suggest the gap between supply and demand may be closing, which should help peg price inflation in the year ahead after 15% price growth last year.

And, an inventory of zoned serviced land shows 12,200 hectares of land capable of yielding 328,000 house units, with scope for 96,000 units in Dublin, 37,000 in Cork, 16,000 in Galway, 19,000 in Limerick and 15,000 in Waterford.

However, while the Department of Environment hails this level of possible supply, builders point out that not all of this zoned land can be immediately developed. Meanwhile, latest Home Bond figures show “a remarkable upsurge in new home building in 2002.

Some 47,079 new private housing starts were registered with the company in the past year, up 63 % on the previous year.

HomeBond MD Michael Greene said that the recovery was partly due to the return of investors and first-time buyers to the market in 2002. Prices also jumped strongly as activity picked up. New house prices nationally rose by over 11% to September, and in key locations jumps of over 20% were recorded and builders sensed the return to confidence.

Supply in urban areas soared: in Dublin it picked up by 85% to record 16,000 new homes; Cork was up 90%; Limerick up 83% and Waterford clocked up increases in supply of 70%.

Analyses suggest over 18,605 new homes a year need to be built in the Greater Dublin Area in order to meet demand up to the year 2011, and previously only 9,000 a year were being built.

Supply is also strong in the broader commuter belt counties of Louth, Westmeath, Wexford, Offaly, Laois and Carlow, as well as in Meath, Kildare and Wicklow.