Housing supply to further increase in 2024, largely driven by apartments, but continued State support needed to ensure stability of future supply due to declining interest of institutional investors – BPFI Housing Market Monitor
- 32,695 completions in 2023, a 55% increase on 2019 levels, prior to the pandemic
- Apartments accounted for over 35% of completions in 2023, up from 16% in 2019
Tuesday 12th March 2024 – The latest Housing Market Monitor Q4 2023 published today by Banking & Payments Federation Ireland (BPFI) shows apartment completions, which rose by 28% to over 11,600 units in 2023, accounted for most of the overall increase (10%) in housing supply last year. However, the declining interest of institutional investors in financing apartments means continued State financial support will be needed in the form of risk sharing with the private sector to ensure the stability of future housing supply.
Level of completions in 2023 higher than total housing supply between 2011 and 2015
Outlining the key findings from the monitor, Brian Hayes, Chief Executive of BPFI stated: “Today’s report demonstrates that there is continued growth in housing supply with 32,695 completions in 2023, a 55% increase on 2019 levels, prior to the pandemic. In fact, the number of completed housing units in 2023 was higher than the total housing supply in the five years between 2011 and 2015.”
Apartments accounted for over 35% of completions in 2023, up from 16% in 2019
“While houses have traditionally formed the majority share of new housing supply in Ireland, the proportion of apartments being built has risen in recent years, increasing from 16% of all completions in 2019 to over 35% in 2023. The number of apartments completed in the last two years alone was more than the total number of apartments built in Ireland in the ten-year period to 2021. It is also likely that the share of apartments will increase further in the coming years as nearly half of all planning permissions approved in the period 2019-2023 were for apartments (101,883 units).”
Mr Hayes continued: “Notably, most new apartments are built for the non-household sector. In Dublin, for example, only 523 new apartments were bought by households in 2023 despite the fact that almost 9,100 apartments were completed during the year. Apartments accounted for over 81% (81.6%) of the 15,385 housing units under construction in Dublin by the end of Q3 2023. This suggests that an increased number of projects aimed at social and affordable housing, as well as cost rental homes, will be coming onstream and should help to free up supply for household purchasers and in turn, ease the demand pressure from potential homebuyers.”
Housing commencements increased by 59% in January 2024 compared to same period last year
“Promisingly for the year ahead, over 32,800 housing units were commenced in 2023, nearly 22% more than the level of commencements in 2022. Commencements figures for January 2024 are also encouraging, with 3,357 housing units started during the month, a 59% increase on January 2023 and the highest level observed in any January period since 2008.”
Continued State support needed to ensure stability of future supply
Mr Hayes concluded: “Following on from a strong year in terms of housing output in 2023, we expect further increase in housing supply in 2024. However, it is likely that a significant share of output in 2024 will be accounted for by apartments. Given the declining interest of institutional investors in financing the development of apartments, the State will have to play an increasing role in terms of risk sharing with the private sector to ensure the stability of future housing supply, in addition to current initiatives aimed at improving the viability of some of the projects.”
ENDS/
The BPFI Housing Market Monitor Q4 2023 is available to download here.
Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has over 125 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace.
Contact: Fiona Murphy, Head of Communications, 087 9740046, fiona.murphy@bpfi.ie or Jillian Heffernan, Director of Communications, 087 9016880, jillian.heffernan@bpfi.ie.
