new home building in ireland to decline until 2012
News Posted On: 03 November 2009
03 November 2009 - UK - Ireland enjoyed a remarkable boom period following accession to the EU when its economy sparkled. Now the former Celtic Tiger is mired in a record recession.
The annual review released yesterday by the Irish House Builders Association (IHBA) indicated that new home building is set to decline for a further three years unless the house building sector sees prospects improve.
In it they say that the number of c ompletions in 2009 should close in on their forecast of 28,000, more than two-thirds lower than the 90,000 new houses built in 2006, starkly illuminating the dramatic decline in new supply.
"The level of development activity has contracted and will continue to contract over the period 2010-2012 until current supply is absorbed and the stock already in progress completed," the IHBA said in its annual review.
The Association also noted that the average price for a new home has dropped by over 40 per cent since the market peaked in early 2007.
Prices have now hit rock-bottom in the opinion of most analysts and commentators. "Current prices are not sustainable in the medium and long-run," IHBA Chairman Dominic Doheny said in a statement. "Companies will not resume building new houses or apartments until market prices reflect all cost inputs and a reasonable return for the investment."
To help resuscitate the economy the Irish government is about to set up the National Asset Management agency (NAMA), a so called "bad bank" that will absorb toxic property portfolios from banks.
54-billion-euro has been set aside for this purpose with the intention that the banks, after getting cash for currently non-performing assets, will be able once again to extend credit.
NAMA will officially be born when a law bringing forth its establishment is passed by parliament on Nov. 12. The annual IHBA reports however that structural reforms are also needed in the entire banking sector if confidence in the economy and the housing market is to be restored, or as the IHBA chairman Doherty put it in a speaking style eerily reminiscent of the former US Defence Secretary Donald Rumsfeld. "I think that once a decision has made we need to build on that decision."
View property in Ireland
View overseas property news
Back to news articles for this country
Latest Related News Articles in Ireland
Get Get Down to the Irish Property Market
2011-12-28
According to the latest data from the central statistics office, residential property prices in Irel.....
Investors Chase Cheapest Irish Propety Since 2003
2011-11-16
With Irish property prices now at their lowest level since 2003, interest from investors is back on .....
Irish Property Market Looking up in 2011
2011-02-07
According to experts 2011 is to be a much better year for the Irish property market, despite austeri.....
Ireland Property To See Beginning of Recovery in 2011
2011-01-21
CB Richard Ellis ios forecasting the makings of recovery in Ireland's commercial sector this year......
Ghost Town Or City Of Dead Life And Death After Irish Boom
2009-12-21
Ireland's property bubble was ten years old when the global crisis hit, plunging the former Celtic T.....
New Home Building in Ireland to Decline Until 2012
2009-11-03
Ireland enjoyed a remarkable boom period following accession to the EU when its economy sparkled. No.....
Irish Government to Buy Bad Mortgage Loans
2009-09-21
The Irish Government has announced that it will buy failing mortgage loans from banks in the hope of.....
Ireland Economic Decline Slows and Property Looks Promising
2009-07-10
Ireland's economy has suffered one of the fastest contractions in Europe, certainly among developed .....
Irish property set to fall in price
2008-11-21
The cost of property in Ireland is likely to decline by ten per cent by the end of 2009, an expert h.....