The total level of house building is forecast at 11,000 units in 2016 and there has been a sharp decline in the availability of industrial space in Dublin over recent quarters, according to a new report by Property Industry Ireland (PII).
The third edition of Property Watch, an initiative of Property Industry Ireland, in association with AIB and DKM Economic Consultants, compiles over 50 different datasets from 20 sources to show the latest trends in the Irish property market.
The report found that only 2,000 housing commencements took place in Q1 2016.
However, there is a substantial quantum of new office supply under construction and awaiting planning, with up to 35 schemes currently under construction in Dublin city centre.
The lack of Grade A office accommodation is the common thread across other urban markets and is putting office rents under pressure, most notably in Cork, where office rents were up by 8% in the quarter.
In the region of €740m of commercial investment transactions were recorded in Q1 2016, just two-thirds of the corresponding level of investment in Q1 2015, while Dublin ranked 15 out of the top 20 most attractive real estate investment destinations in relation to their economic size.
Property Industry Ireland director Dr Peter Stafford said: “Based on leading indicators, it looks like only 11,000 new houses will be completed in Ireland in 2016. This represents another year when demand for new houses will far outstrip supply. While it is good news that the proportion of one-off houses is falling, more needs to be done to bring new developments through financing and planning, and on to construction.”
Annette Hughes, director of DKM Economic Consultants, who compiled the report, noted: “The one common thread across the commercial property sectors is the growing scarcity of Grade A space in sought after locations, which is putting rents under pressure. Moreover in an economy that has expanded by almost 20% in that period and with employment up by close to 160,000 from the lowest point in the last recession, it is inevitable that there would be a space requirement to accommodate that growth. We are seeing substantial development already underway in Dublin as a result, with up to 35 building projects currently underway in Dublin city alone.”