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Lowest New House Completions...

New-house completions at lowest since 1970s...


HOUSE completions are to fall to their lowest level since records began in the 1970s.

The number of new homes expected to be finished next year will be 10,000, whereas even during the recession-hit 1980s the lowest number of completions was 15,654 in 1988.

A gloomy economic forecast from the Department of the Environment says it will be another two years before we see a return to economic growth. And it says that the estimated 150,000 unsold homes currently on the market will discourage new building activity for the next four years.

The Construction Industry Outlook 2009-2011, conducted by DKM Economic Consultants for the department, finds that the current downturn in the industry is the most severe on record and that the number employed in the industry could fall to just 138,000 by the end of the year. This is half the number employed in 2006 at the height of the boom when 267,000 people worked in construction.

New figures from the Department of the Environment show that just 7,611 units were completed in the first three months of 2009, a drop on 46pc on the same period in 2008, and it's expected that only 17,000 will be built this year.

This number will plummet again to the lowest level on record in 2010 and 2011, when only 10,000 units are expected to be finished. This will have serious implications for state coffers, with stamp duty receipts already in freefall because of the collapse in the housing market. And with no improvement expected until at least 2012, it means the Government will not be able to rely on taxes from property purchases.

"The most pressing problem in the residential market is the surplus housing inventory, which is leading to lower prices and lower production," the report says. "The oversupply of units available in the market -- over and above what is considered as the 'normal' level of vacant units -- is estimated at 136,000 units on average, which is equivalent to around four years of current housing demand although this is likely to be considerably less in some areas of the country.

Pressure

"The cut back in production is very severe, with less than 5,000 commencements in the first half of 2009. With public sector construction under pressure due to financial constraints, the medium-term projection is for just 10,000 new residential dwellings per annum in 2010 and 2011."

A spokesman for the Construction Industry Federation said the fall in house completions meant that valuable skills were being lost, and that when the economic recovery came the industry might not be able to cope with demand.

The report also says the value of construction output in 2008 was €32bn, or 21pc of GNP. This figure is expected to fall to €20bn by the end of the year.



Report by Paul Melia - Irish Independent.

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