The latest Housing Market Monitor Q2 2021 published today by Banking & Payments Federation Ireland (BPFI) shows housing activity is increasing significantly with a healthy pipeline of housing supply and mortgage demand pointing to strong growth potential. The monitor also highlights a shift in construction activity away from Dublin as builders focus more on other regions, especially the Dublin Commuter belt.
Speaking on the latest trends highlighted by the Monitor, Brian Hayes, Chief Executive, BPFI said: “In terms of overall housing activity, notwithstanding the negative effects of the pandemic, we see that activity levels are increasing significantly. The recovery of the residential construction sector continued with the removal of pandemic-related restrictions on activity in the sector from May 2021. The total number of completions in the first half of 2021 stood at 8,955, which was around 10% higher compared with the same period in 2020 and only 1% less than total completions in the same period in 2019. If the sector continues to build at a rate similar to second half of 2020, it is likely that total completions in 2021 can reach 22,000 units.”
“Commencement levels were also severely affected during the initial period of the pandemic. But, on an annualised basis, almost 27,300 units were commenced in the twelve months ending June 2021, the most in any twelve-month period since the twelve months ending October 2008, which is likely to increase the number of completions significantly in 2022.”
“At the same time there is strong effective demand for housing reflected in the pipeline for housing supports and mortgages with some 26,000 applications for the government’s Help to Buy scheme in the first seven months of the year and almost 54,000 residential mortgages approved in the twelve months ending July 2021.”
Shift in construction activity away from Dublin
Mr Hayes also pointed to the shift in construction activity away from Dublin to the Dublin commuter region in particular: “Dublin’s share of building activity has fallen in recent years as builders focus more on other regions, especially the Dublin Commuter belt. We can see from the data that overall Dublin accounted for around 28% of all house completions in the first half of 2021, however this share has been declining since 2017 after reaching 39%. Breaking down the types of completions, it’s interesting to note however that Dublin continues to have the most apartment completions accounting for about 68% of all completions at the national level. In terms of commencements we also see that Dublin’s share of total commencements stood about 35% as of the first half of 2021 declining from around 44% in 2015.”
“The shift in construction activity towards outside Dublin is also evident in the sale of new properties, where about 36% of market property transactions in the Dublin Commuter region during the first half of 2021 were for new properties, compared with around 25% in 2011. By comparison, only 23% of transactions in Dublin and 19% in Cork were for new properties.”