Housing Commencements Soar to Record Levels in Ireland, Predicted to Continue Momentum in 2024
In a robust finish to 2023, Ireland has witnessed a significant surge in housing commencements, marking the highest level of residential construction since the global financial crisis, according to the latest analysis from Goodbody Analytics.
The data reveals that construction commenced on approximately 3,432 units last month, reflecting an impressive 91% year-on-year increase. This surge capped off a strong quarter, with housing starts in the final three months of the year rising by an impressive 51% compared to the same period in 2022.
Goodbody’s estimates for the entire year are equally remarkable, with a total of 33,000 commencements recorded in 2023, the highest since data on commencements became available in 2014.
Dermot O’Leary, Chief Economist at Goodbody, highlighted the historical significance of these numbers, stating, “This is the highest level of residential construction in Ireland in the post-GFC period.”
The momentum is expected to carry into 2024, with Goodbody now forecasting that completions are on track to reach 35,000 units this year.
Breaking down the numbers, the Dublin region took the lead with 42% of commencements, followed by the mid-east region at 17%, and the south-west of the country at 12%.
O’Leary noted that the growth in new apartment commencements exceeded expectations, rising by 27% compared to 2022 levels, totaling 13,000 units. Dublin dominated this sector, accounting for over three-quarters of all apartment commencements.
Explaining the dynamics behind this surge, O’Leary pointed to the increased involvement of public sector entities, such as approved housing bodies and the Land Development Agency, which played a pivotal role in kickstarting projects as demand in the private residential sector waned.
Scheme housing also witnessed a substantial uptick, recording a 29% increase in commencements in 2023, with a staggering 92% of these homes planned for Dublin.
Despite these positive trends, Goodbody emphasized that housing supply remains below the necessary levels to meet the demands of the Irish population. O’Leary suggested that the availability of fully serviced land may be a constraint, particularly in the context of what he considers low national housing targets.
“This is an issue we will hear more about this year as household formation projections are reviewed by the government,” O’Leary added, hinting at potential discussions and policies to address the ongoing housing challenges.
Source: Irish Independent
