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Irish Construction Projects Jump 300Pc But Its Not Enough

News Posted On: 30 December 2014

In the first nine months of 2014, €1.47bn worth of multi-unit residential projects have been launched – a 300% jump on the year before. That’s the latest news from research consultancy Lin2Plans, which analyses planning activity on behalf of industry. According to their figures, a total of 264 multi-unit development projects were commenced in the period January-September 2014, which translates to 6, 388 new homes across Ireland when those projects come to fruition.

However, the new homes aren’t evenly distributed, with Dublin getting the lion’s share.

When [the report is] examined on its own,’ said Link2Plans’ managing director Danny O’Shea, ‘it emerges that Dublin has seen a fourfold increase in the number of residential developments in the same period.’

In fact, Dublin saw 108 apartment and new home projects, about two fifths of the total for the whole country, and there should be 3, 610 new homes in the capital when those projects are completed. This is the first time that we have had a figure for the number of homes and apartments actually under construction at any given time,’ commented Mr. O’Shea.

However, the new starts in Dublin are concentrated in the first quarter of the year. 76 projects began in the January-March quarter, 11 in the April-June quarter and 21 in July-September.

Looking out across the rest of Ireland, Leinster saw 74 multi-unit developments get off the ground in the first nine months of the year, which means 1, 312 homes for the region – with an estimated value of €314m. Munster saw 59 developments totalling 1, 314 units and an estimated value of over €288m.

The figures for Connaught and Ulster reflect those counties’ comparatively sparser populations; there has been a far lower level of residential construction there, with just 23 multi-unit developments in the first nine months of 2014, and a total of just 152 units, indicating smaller developments as well as fewer; the sae value is likely to total no more than €27m.

The national average of new homes per 1, 000 population was 0.46, with Dublin leading the way at 0.95, about twice the national average, while Connaught and Ulster saw just 0.06 new units.

However, it’s possible that the figures are skewed toward urban regions for other reasons: Link2Plans figures do not include one-off builds or extensions, meaning the actual number of homes created could be higher, especially in the countryside.

If the figures can be taken as indicative, though, Ireland is well below the Economic and Social Research Institute (ESRI)’s estimate of the number of new homes the country is likely to need. According to the ESRI, Dublin alone requires 54, 000 new homes between now and 2021, a rate of over 7, 000 homes per annum or slightly under double the number of starts for the year so far.

That disparity between demand and supply has begun to show in a rising spiral of prices in the capital, where rents rose by 17% over the past year and the National Competitiveness Council has warned that price and rent rises in Dublin and across other Irish cities ‘represents a potentially destabilizing development’ and could lead to a new housing bubble.

Written by Les Calvert of www.property-abroad.com - overseas property reporter

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