This month saw the publication of a number of important reports for the construction and real estate industries in Ireland. Below are some of the key insights from three of these reports, together with links to the publications in full.

IPAV Property Price Barometer January to June 2020 https://www.ipav.ie/news_publications/ipav-property-price-barometer-january-june-2020

According to the most recent IPAV Residential Property Price Barometer, prices have remained unexpectedly steady since the beginning of lockdown in mid-March. Research garnered from IPAV members shows that for the first half of 2020 prices fell by -0.7 percent across the country, bringing the average home price to €262,312. However, house price increases have been recorded in areas  around Cork, Westmeath, Louth and Laois where buyer demand has increased.

This biannual market report reveals a significant drop in the number of new homes and second-hand homes coming to market, which continues to drive competitive bidding amongst would-be buyers. Austin Hughes, chief economist with KBC Bank says that there was no panic selling observed, as was seen in the previous downturn. He also expressed concern about critical issues, including the return to normal production levels of building new homes and mortgage activity. In the Dublin market, prices for two-bedroom apartments decreased in all areas except Dublin 14. One of the key insights from this industry report is that Dublin is short approximately 300,000 homes right now.

IHBA: Putting Affordability at the Heart of the Housing System https://cif.ie/associations/irish-home-builders-association/

Findings from a recently-published report on affordability and supply issues, carried out by EY-DKM Economic Advisory Services on behalf of the IHBA (Irish Homebuilders Association), surmises that 36,000 new homes are needed in Ireland every year for the next two decades in order to keep up with demand. Also, the report highlights the need for the State to put initiatives in place to help lower the cost of construction and improve supply. In fact, close to 30 potential solutions were proposed as part of this comprehensive industry report. These proposed solutions range from reform of elements of the planning process (already underway) right through to tackling bank lending discretion for first time buyers and addressing rent affordability issues, which inhibits people’s ability to save for a home deposit. The report points out that delays in the planning system negatively impacts on project commencements and the viability of developments. The IHBA also recommends that density requirements under current  planning guidelines be reassessed and that all future industry regulations undergo a cost-benefit analysis, as regulation can account for up to 20 percent of the cost of a new home.

CBRE bi-monthly research report – September 2020

https://www.cbre.ie/en/research-and-reports

Echoing the findings of the IPAV report, CBRE confirms that the impact of Covid-19 has not been as severe as initially forecasted. Also, one of the key insights from the above-mentioned report is that there is considerable investor liquidity built up and looking to deploy into Irish real estate, which is positive. Transactional activity in the retail sector remained largely paralysed, as expected, while there is particularly strong demand for social leasing investments and healthcare opportunities in the current market. Office occupiers remain hesitant to make long-term commitments, with an increase in demand for more flexible leasing solutions. The commercial agency acknowledged the role that technology has played in facilitating the industry and supporting teams working remotely.