Housebuilding in Dublin returns to Celtic Tiger levels

Residential construction in Dublin returned to Celtic Tiger levels in the second quarter of 2021, with housing commencements across the four local authorities jumping to 5,000.

This was the highest quarterly level since the mid-2000s, and followed an exceptionally weak start to the year, the latest Dublin Economic Monitor said.

The report, compiled on behalf of the city’s four local authorities, said housing completions also increased to 1,624 in the quarter, providing “the highly active housing market with much-needed supply”.

A faster-than-expected recovery in residential construction is forecast to see up to 22,000 homes built nationally this year and as many as 27,000 next year. The Government’s Housing for All strategy is promising 33,000 new homes a year out to 2030.

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The latest monitor shows business activity in the capital rose to a six-year high in the second quarter – Dublin had the strongest purchasing managers’ index reading (60.2) since 2015 as growth was recorded across each of the three monitored sectors of services, manufacturing and construction.

The pick-up in activity also saw number of recipients of the pandemic unemployment payment fall by approximately 20,000 month-on-month to just over 60,000 in August.

Consumer retail spending rose by 5.1 per cent quarter-on-quarter and by 17.1 per cent year-on-year, with strong recoveries in the entertainment and discretionary categories as a return to bricks-and-mortar outlets was in evidence, the report said.

It also noted that hotel occupancy rates rallied to 43.1 per cent in July, up considerably from the low point of 5.9 per cent in June 2020, as domestic and international visitors returned to the capital.

"A stronger sense of optimism is enveloping the Dublin economy now that final restrictions are lifting," Andrew Webb, chief economist with Grant Thornton, said. "Supporting the sense of increased positivity is evidence from Grant Thornton's recent business survey which shows that 76 per cent of Irish businesses are optimistic about the outlook for the economy over the coming 12 months," he said.

“ Not only are firms increasingly optimistic, four in 10 Irish businesses are expecting to increase employment.

“The outworking of this upbeat assessment has led the EU Commission to forecast that the Irish economy will grow by 7.2 per cent in 2021, and this will be expected to further boost economic activity in the capital,” he added.