The pandemic has had a “significant, negative impact on housing output” and supply is now unlikely to meet demand until at least the end of 2024, the Banking and Payments Federation Ireland (BPFI) has warned.
In its latest quarterly report on the housing market, the umbrella group for the banking industry also warned that the rising cost of building materials due to the pandemic and Brexit, could further aggravate affordability issues in the market.
While housing completions amounted to just 3,953 units in the first quarter of 2021, a reflection of the lockdown imposed on construction activity, it said this was just 7 per cent lower than in 2019 when there were no restrictions.
The BPFI also noted there had been a significant pick-up in commencement activity since April.
This, combined with the more than 5,600 units that were started in 2019 but were not completed in 2020, should feed into housing output during 2021 and 2022.
It predicted that total house completions this year would be about 21,000, similar to last year.
The group’s report noted that property prices in Dublin had nearly doubled since their February 2012 low and that average national prices were 15 per cent lower than their highest level observed in 2007.
The BPFI also published loan data, which show the average age of a first-time buyer has increased from 31 in 2008 to 34 in 2020, while the average age for leaving the parental home has also risen from 25.4 years to 28.1 years.
The industry group also documented what it said were input price pressures in the market, “which could have a knock-on effect on output prices”.
It said recent supply shortages in construction materials due to the pandemic as well as Brexit had caused significant increases in input prices, which could lead to future price rises even as the supply gap closes.
It also warned that the availability of skilled labour could become an issue.