Housing commencements to pass 15,000 for first time since 2008

New housing commencements are expected to surpass 15,000 this year for the first time since 2008, pointing to a significant pick-up in house-building, according to an analysis by the Construction Industry Federation (CIF).

Using commencement data from the Building Control Authority, the federation's study showed that 14,917 new houses were started in the first 10 months of 2017, which was 36 per cent up on the same period last year. If the trend continues, the CIF estimated that total commencements would approach 18,000 by the end of 2017.

Commencement notices are, however, an imperfect indicator of housing output as notices of commencement do not guarantee construction, while construction on big developments is usually phased over several years. Nonetheless, the CIF described the latest data as “clear progress” in tackling the current housing shortage.

While the figures around actual housing output are disputed, the Economic and Social Research Institute (ESRI) recently upgraded the required housing output target for Ireland from 25,000 per year to 35,000 per year.

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CIF director general Tom Parlon said Minister for Housing Eoghan Murphy's recent changes to apartment building standards were a vindication of the CIF's long-standing position that apartment building had become too prohibitive.

“The Government’s changes here are a vindication of our consistent position that apartment building is not viable currently due to overly-restrictive building requirements.”

Height restrictions

Despite a big rise in demand, the supply of new apartments in Irish cities has not recovered from the crash. In a bid to boost supply Mr Murphy recent overhauled the planning guidelines, easing height restrictions and removing the need for parking, which were viewed as onerous by developers.

“Traditional developers, banking institutions and international institutional investors cannot deliver apartments under the current system,” Mr Parlon said.

He also highlighted the lack of available finance and planning delays as key issues that needed to be addressed. “Where there is finance available, construction is occurring strongly. Hotel, commercial, student accommodation and particular types of housing are also showing strong activity. This is fuelled by prudent lending by financial institutions. However, there is pent-up demand for more housing and apartments that currently surpasses the levels of finance available.”