Rents and house prices will likely rise for a number of years as the supply of new homes won’t start meeting demand before 2023 at the earliest, according to broker Goodbody.
New figures from the CSO showed a sharp increase of 25.4% in the number of new homes completed last year, but the annual output of 18,070 was still about half of the number needed to start reining in the huge rises in rents and house prices of recent years.
The total number of new dwelling completions in 2018 was 18,072, an increase of 25.4% on the 14,407 built in 2017https://t.co/psj3wxM5PU#CSOIreland #Ireland #Housing #HousingConstruction #HouseBuilding #NewDwellings pic.twitter.com/javI5kYo1u— Central Statistics Office Ireland (@CSOIreland) February 7, 2019
Goodbody forecasts that rents will rise 5% this year and by 4% in 2020, representing increases well above those in consumer prices and average pay.
House prices will increase by 6% and 5.3% this year and next, respectively, predicted the broker, with prices charged for new homes falling increasingly out of reach of the typical first-time buyer.
On supply, “it will definitely not be a short-term success”, said Goodbody economist Alexander Wilson.
By region, most new homes in 2018 were built in Dublin and the mid-east, followed by the south-west, south-east, west, and the midlands, according to the CSO figures.
The figures also show that the number of apartments has increased but their share of total completions remains small.
A total of 785 new apartments were built in the three months to the end of December, bringing the number built in 2018 to 2,372.
Number of new dwelling completions up 20.9% in Q4 2018https://t.co/psj3wxM5PU#CSOIreland #Ireland #Housing #HousingConstruction #HouseBuilding #NewDwellings pic.twitter.com/ZlW3sB0GFS— Central Statistics Office Ireland (@CSOIreland) February 7, 2019
The CSO said its figures for the time being exclude housing units built for students.
Nonetheless, “there are some signs of improvement”, said Goodbody, citing the rise in new apartment builds in the quarter, and “a surge in both planning permissions granted and applied over the past four months associated with the ending of the uncertainty around building regulations and heights”.