Volume of house building still falling despite supply shortages

The recent surge in house prices, most notably in Dublin, has been blamed almost entirely on a chronic lack of supply. Photograph: Frank Miller/Irish Times

The volume of construction in Irelands residential property sector is continuing to fall despite the acute housing shortages in Dublin and elsewhere.

Figures from the Central Statistics Office (CSO) show the level of residential building in the State fell by 1.9 per cent in the second quarter of this year, the second consecutive quarterly decline.

The figures also show that on an annual basis, residential building has now dropped by 8.8 per cent.

The CSOs measure is a gauge of activity in the sector and differs from the monthly house completion numbers released by the Department of the Environment.

Nonetheless, it suggests the current level of building and construction in the economy is nowhere near the rate needed to satisfy the current demand for housing.

The recent surge in house prices, most notably in Dublin, has been blamed almost entirely on a chronic lack of supply.

Only 10,000 new homes are expected to be built this year, whereas the Government and the Economic and Social Research Institute (ESRI) believe 25,000 are required every year to meet demand.

Construction Industry Federation director general Tom Parlon said it was surprising to see that the level of residential building activity was down for the second quarter in a row.

At a time when there is a dire need for more housing, we should be seeing an increase in the volume of production, but it has fallen by 7.5 per cent since the end of 2013. This again highlights the problems that exist in the housing market, he said.

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Volume of house building still falling despite supply shortages