CIF analysis of current house building activity levels

Jeanette Mair – Executive: Housing, Planning & Development

CIF analysis of current house building activity levels during the first 9 months of 2016 shows modest progress in the face of continuing acute demand. The Government has set out an ambitious target of 25,000 units per annum with current estimates of 2016 output of circa 14,000. A number of initiatives have been put in place to facilitate greater supply including the Local Infrastructure Housing Activation Fund (LIHAF) of €200million and the establishment of the Housing Delivery Office. CIF is working with the Department to ensure these initiatives have maximum impact on the delivery of quality housing.

In summary:

      – 4,005 residential units were registered in the nine month period January to September 2016. The figures represent an increase of 16.5% (567 units) in developer led activity nationally on the same period in 2015.
      – 8,220 residential units were commenced in the nine month period January to September 2016. The figures represent an increase of 29.5% (1,874 units) on the total number of units commenced during the same nine months in 2015. Individual/One Off housing units represent just 41% of total commencements and increased by 38.9% on the same period in 2015.
      – 10,507 residential units were completed in the nine month period January to September 2016. The rate of house completions in the first nine months of the year represents a 17.9% increase in activity on the same period in 2015 and a 17.4% increase on the rolling 12 month period to the end of September 2016. The average monthly completion figure currently stands at 1,167 units.

The 10,507 residential units completed in first nine months of 2016 can be broken down by type as follows:

      – Individual/One Off Units: 4,348 units or 41.4%
      – Scheme Units: 4,393 units or 41.8%
      – Apartments: 1,766 units or 16.8%

These leading indicators show us that the total number of new housing units expected to come into the Irish residential property market should be circa 14,000 units by the end of 2016 (albeit 40% will be individual/one-off units not typically for sale). This level of output would result a 10.5% increase in supply on 2015. This is a moderate increase considering the acute demand for new homes arising from demographic pressures, new household formation and economic growth.

Analysis of the Housing Agency’s housing supply requirements 2014-2018 illustrates a level of pent up demand for new homes. When compared against housebuilding completion data the industry has built 25% of the estimated housing supply required from 2014 to 2016 nationally, and just 23% of the estimated supply required over the same period in Dublin.

The housebuilding industry is working very closely with all stakeholders involved in the delivery of new homes, particularly the Department of Housing, Planning, Community & Local Government, and its recently established Housing Delivery Office, to address the challenges obstructing new development.

This month, Minister for Housing, Planning & Local Government, Simon Coveney T.D. launched Pillar 3 of Rebuilding Ireland: The Action Plan for Housing and Homelessness. Rebuilding Ireland’s third pillar will focus on improving the viability of housing construction, with the objective of doubling the completion level of additional homes in the next four years to deliver over 25,000 homes on average per annum. Click this link to find out more: http://rebuildingireland.ie/build-more-homes/

Statistics analysed by CIF and sourced from: DoHPCLG, BCMS, HomeBond.