New Homes Completed Ireland 2023: BPFI Report Reveals Surging Housing Market



According to the BPFI report, over 30,000 new homes are expected to be completed in Ireland this year, driving a surge in the housing market. Discover the latest trends and demand in the Irish housing market.

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According to a recent report released by the Banking and Payments Federation Ireland (BPFI), the housing market in Ireland is set to experience a significant surge in new home completions. The report, titled the Housing Market Monitor, highlights the steady increase in housing supply and the sustained pent-up demand driving the market.


New Homes Completed Ireland 2023: BPFI Report Reveals Surging Housing Market

Ali Uğur, Chief Economist of BPFI, emphasized the robustness of the housing market, stating, "Current indicators show that new housing supply remains strong. In the past 12 months, a total of 30,546 units were completed by the end of Q2 2023, compared with 24,841 units during the same period in 2022."

With the pace of construction witnessed in the second half of 2022, it is highly likely that total completions in 2023 could surpass 30,000 units. Encouragingly, there are also signs of future activity, as a substantial number of 18,546 units were commenced in the first seven months of 2023, representing an increase of nearly 2,000 units compared to the same period in 2022.

In addition to the increased housing supply, BPFI's report also highlights strong demand from first-time buyers (FTBs) for mortgages. This demand remains prominent despite a broader market slowdown, primarily attributed to a decline in switching activity.

While the total number of mortgages approved and drawn down in 2023 is projected to be lower than the levels observed in 2022, a solid demand for mortgages from the FTB segment is expected. Notably, FTBs accounted for approximately 62% of the volume and value of mortgage approvals in July 2023. The same month saw almost 30,000 FTB mortgages approved, collectively valued at nearly €8.4 billion, marking the highest annualized levels since data collection began in 2011.

To further bolster FTB mortgage demand, the government's Help to Buy scheme and First Home Scheme have played essential roles. From January to August 2023, the Help to Buy scheme received 23,635 applications, a significant increase compared to the 19,354 applications received during the same period in 2022. With 4,800 claims already made in 2023, there are many more applications yet to be processed.

Similarly, the First Home Scheme received approximately 1,900 approved applications up until the end of June 2023, resulting in 456 homes purchased under the scheme. These schemes provide valuable insights into the potential future demand for FTB mortgages.

In light of these developments, the overall housing market in Ireland remains robust, with soaring demand driven by an increasing supply of new housing and the prevalence of pent-up demand. The number of privately rented homes has also witnessed an 8% increase, reaching approximately 331,000 between 2011 and 2022. It is anticipated that many renters will eventually transition into homeownership, further fueling the demand for housing in the coming years.

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The CSO Census 2022 shed light on an additional aspect contributing to the medium-term housing demand. It revealed that more than 175,000 adults aged between 25 and 39 were still living with their parents, a significant rise from the 151,000 recorded in 2011. These statistics, when combined, clearly indicate a substantial need for both rental and purchased housing.

With the growing housing supply and declining price inflation, affordability pressures are expected to alleviate, particularly for the aforementioned cohort aspiring to purchase a home in the medium term.

In conclusion, the report from the Banking and Payments Federation Ireland (BPFI) paints a positive picture for the Irish housing market, highlighting the strong supply of new homes and the unwavering pent-up demand. The projected completion of over 30,000 units this year demonstrates the industry's commitment to addressing the housing crisis in Ireland. Additionally, the robust demand from first-time buyers and the promising indicators from government schemes contribute to a positive outlook for the sector.

New Homes Completed Ireland 2023: BPFI Report Reveals Surging Housing Market

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