Housing output jumps to highest level in over a decade

The number of new homes built in the first quarter of 2022 was the highest in over a decade.

The increased output was, however, largely down to increased apartment completions in Dublin, which has seen a surge in investment in the build-to-rent sector.

Goodbody chief economist Dermot O’Leary noted that the number of housing schemes completed was flat on a two-year comparison, while the number of one-off units was up just 1 per cent.

The latest Central Statistics Office (CSO) completions data indicate there were 5,669 new dwellings constructed in the first three months of this year, up 44.5 per cent on the same period last year, when there were Covid-19 restrictions were in place.

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The figure was 15 per cent higher than the pre-pandemic first quarter of 2020. It was also the highest level of completions seen in any first quarter since the CSO series began in 2011.

The biggest growth area was apartment completions, which grew by 148.5 per cent to 1,742 and accounted for over 30 per cent of total housing output during the quarter. More than four-fifths of all apartment completions were in Dublin (85.5 per cent).

The build-to-rent sector in Dublin and other cities has attracted a flood of foreign investment with high rents providing investors with strong returns.

Of the 5,669 completions so far this year, 49.8 per cent of the units were in housing scheme developments and 30.7 per cent were apartments while 19.5 per cent were single dwellings.

Five of the six regions of the Republic – all except the West region – saw an increase in completions in the first quarter. In Dublin, the number of completions more than doubled in year-on-year terms, rising 120.8 per cent . There were also large relative increases in the Southeast (77.6 per cent) and the Midwest (61.9 per cent).

The Central Bank is forecasting that about 25,000 new housing units will be built this year, rising to 30,000 in 2023 and 35,000 in 2024. The 35,000 figure is roughly the estimated level of demand in the market, although some say it is higher.

Mr O’Leary said the growth in housing ouput may be built on shaky foundations as it masked weak growth in traditional housing output.

He noted apartments accounted for 28 per cent of total completions in the past 12 months, a record high. 67 per cent of completions in Dublin have been apartments. “Trends in planning permissions suggest that these shares will go even higher in the coming quarters,” he said.

Explaining the trend towards apartments, he said national planning policy (NDP) is pushing higher densities to avoid a repeat of the sprawl of the past few decades.