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BPFI Housing Market Monitor highlights on-going price and rental pressures – despite increasing housing supply

28th November 2017

Banking & Payments Federation Ireland (BPFI) today published the BPFI Housing Market Monitor for Q3 2017. In addition to presenting a unique range of loan-level data, the Monitor draws on a range of published data under the three key headings of housing supply, housing prices and rents, and housing transactions in its assessment of the current state of the housing market.

In his commentary accompanying the report, BPFI’s Chief Economist, Dr Ali Uğur, refers to data from the Department of Housing, Planning, Community and Local Government as showing a significant pick-up in both house completions and commencements – increases of 29% and 44% respectively over the first nine months of 2017.  While this pick-up is most welcome, he goes on to state:

“Given current trends, it is likely that there will be over 18,000 units commenced in 2017.  However, these figures are still nowhere near the estimated required 40,000 units per annum when factors like natural increase in population, migration pressure, falling household size and obsolescence are taken into account.”

Dr Uğur also notes that the statistical link between commencements and completions has broken down, such as to call into question the reliability of published completion figures.  Based as they are on connections to the electricity network, these completion figures capture the number of units coming into the market.  However, they do not necessarily reflect the true nature of full residential construction activity.

Finally, he points to on-going growth in mortgage activity in support of the housing market.

“BPFI data show that there were 9,506 mortgage drawdowns valued at €2,016 million in the third quarter of 2017. This brings the total drawdowns to just over €5 billion in the first nine months of 2017 compared to around €3.8 billion during the same period in 2016 – a 32% increase. Mortgage approval activity increased in volume terms by 13.6% year-on-year in Q3 2017 bringing the total number of approvals to 32,653 in the first nine months of the year. In value terms activity increased by about 40% over the same period with the total value of approvals reaching nearly €7 billion in the first nine months of 2017.”

To view the report, click here.

Note: Banking & Payments Federation Ireland (BPFI) is the voice of banking and payments in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Contact: Keira Doyle, Head of Communications, 086 269 4460

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