Home completions likely to fall below 18,000 this year, Goodbody forecasts

Home completions are likely to fall sharply in 2020 to below 18,000 units, with growth already showing signs of slowing before the coronavirus pandemic restrictions stopped building work, new research has found.

Goodbody Analytics’ BER Tracker said growth in home-building activity slowed in the first quarter of the year to the lowest rate since 2013.

New dwelling completions grew by 6 per cent year on year to 4,500 units, compared to 18 per cent growth in the fourth quarter of 2019. That brought the rolling four quarter total to 21,500.

There were regional variations in the figures. In the Greater Dublin area, completions fell 4 per cent year on year, while completions in Dublin itself were up only 2 per cent.

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Outside the Greater Dublin area, completions increased by 21 per cent, but the commuter counties saw completions down 12 per cent year on year, following five years of rapid growth.

That left the growth primarily to the west of the country, with completions up 63 per cent, and the Midlands, where completions were up 56 per cent year on year.

‘Significant fall’

The number of apartments completed also grew during the quarter, increasing 39 per cent to 800 units. About 4,000 apartments have been completed in the past 12 months, which accounts for about 18 per cent of total residential output. That puts Ireland at one of the lowest shares in Europe, with apartments expected to represent 60 per cent of the EU's new residential completions in 2020.

However, there may be further knock-on effects for the year as a whole, the report said. “Given the current shutdown, coupled with expected social-distancing measures when sites reopen and the changed economic environment, we can expect a significant fall in output for the rest of the year, with output for the full year now likely to be below 2018 levels of 18,000,” Goodbody said.

Goodbody warned the economic shock of restrictions imposed to halt the spread of Covid-19 would hit the property market, even after the Government begins lifting restrictions. The sector is likely to be a key focus for any recovery plan over the coming months.

“The demand environment will be impacted negatively, and is likely to result in a reassessment of supply plans by some developers,” the report said.