The housing market has not been severely impacted by Covid-19 and has outperformed expectations, according to a new report from Goodbody.
Its latest BER Housebuilding Tracker – which it calculates using data from Building Energy Regulation certificates – estimates that 5,500 units were completed in the third quarter of the year.
That was up from 3,290 in the second quarter of the year, when the pandemic restrictions were at their most severe and building sites were closed down for several weeks.
According to Goodbody’s calculations, that left output just 3% lower year on year.
“This suggests that productivity levels have not been as severely affected by social distancing measures as we would have feared,” Dermot O’Leary, chief economist with Goodbody said.
“We now expect 20,000 units to be completed this year, down 8% year on year, and up from our previous estimate of 16,500,” he said.
The Central Bank estimates that 35,000 completions a year are needed to satisfy demand.
However, Goodbody also said there were some indications that the impact of the Covid-19 pandemic may be longer lasting.
Many of the completions in the most recent quarter were accounted for by developments being completed at a faster pace.
In the three months to August, housing starts fell by over a third.
Goodbody also revised downwards its expectation for house price reductions.
It now expects prices to fall by 5% by the middle of next year – half its previous forecast.
Rents are expected to fall to a greater extent, the stockbrokers also predicted.
“Mortgage lending is making some recovery, but we still expect new lending to fall 20% in 2020, before growing by 9% next year,” Mr O’Leary said.
“Given the unpredictable nature of the virus and the government reaction to it, forecasts are still subject to a higher degree of uncertainty than normal,” he added.