Residential property supply tightens in 2022 despite sharp increase in construction activity and new address points

GeoDirectory Residential Buildings Report for Q4 2022 finds that demand is continuing to outpace supply, as the rate of vacant properties falls

• 22,008 residential buildings were under construction in Ireland in December 2022, representing a 12.9% increase year-on-year
• In the twelve months to December 2022, 28,510 new residential address points were added to the GeoDirectory database, an increase of 58% compared to December 2021
• 83,662 residential properties were recorded as vacant in December 2022, resulting in an average national vacancy rate of 4.0%
• The counties with the highest vacancy rates in the country were Leitrim (12.2%) and Mayo (11.2%), while the lowest vacancy rates were recorded in Dublin (1.2%) and Kildare (1.3%)
• In the twelve months to October 2022, the national average house price increased by 9.5% to €352,083, while 18.2% of all residential property transactions were for newly built dwellings
  

January 31st 2023: Residential construction activity and supply of housing stock has increased in 2022, according to the latest GeoDirectory Residential Buildings Report. The study of residential property data, prepared in association with EY, found that in the twelve months to December 2022, 28,510 new residential address points were added to the GeoDirectory database, representing an increase of 58% on the corresponding period in 2021. In addition, 22,008 residential buildings were under construction in December 2022, an increase of 12.9% year-on-year.

Residential Construction Activity

Of the 22,008 residential buildings under construction in December 2022, almost one-in-five (18.4%) were located in Dublin. Construction activity was also strong in Kildare, which accounted for 13.9% of the overall total. 62.0% of all residential buildings under construction were located in the Leinster region.

In Cork, 2,393 residential buildings were under construction in December 2022, representing 10.9% of the national total, with the remaining counties of Munster brining the percentage share to 21.9%. Residential construction activity was considerably lower in the Connacht and Ulster counties, accounting for 9.5% and 6.7% of the national total respectively.

New Additions to GeoDirectory Database

In the twelve months to December 2022, a total of 28,510 residential address points were added to the GeoDirectory database. This represents an increase of 58% new address points, when compared to the corresponding period in December 2021. Over half (52.8%) of the new residential address points were located in the Greater Dublin Area of Dublin, Kildare, Meath and Wicklow.

The highest year-on-year increases in terms of new residential address points were recorded in Sligo, which was up 150% in twelve months, followed by Tipperary (+ 101.0%) and Louth (93.0%).

Vacant and Derelict Properties

The national average vacancy rate dropped 0.4 percentage points to 4.0% in December 2022, the lowest figure recorded by GeoDirectory to date. The highest residential vacancy rates were located in the west of the country, with Leitrim (12.2%), Mayo (11.2%) and Roscommon (10.7%) all recording residential vacancy rates of over 10.0%.

At 1.2%, Dublin recorded the lowest residential vacancy rate in the country in December 2022, with counties within the capital’s commuter belt all registering notably low vacancy rates, Kildare (1.3%), Louth (2.3%) and Meath (2.4%).

The GeoDirectory Residential Buildings report also found that the number of derelict residential address points fell by 4.8% in the twelve months to December 2022. In total, there were 21,481 derelict units identified nationwide, with the highest proportion found in counties along the west coast, Mayo (13.5%), Donegal (11.9%) and Galway (8.7%).

Analysis of Residential Property Transactions

The average residential property price increased by 9.5% to €352,083 in the twelve months to October 2022, with the average price rising in every county.  The average cost of a residential property in Dublin was €526,910, while Longford was the county with the lowest average price (€162,990). When Dublin is excluded from the study, the national average house price falls to €270,855.

A total of 47,716 residential properties were purchased across Ireland in the 12 months to October 2022, an increase of 3,606 transactions on the previous year. Almost one-in-five of all residential property transactions in the state involved a new dwelling (18.2%), with the highest proportion of new dwellings were purchased in Kildare (43.5%), Meath (36.6%) and Wicklow (34.8%).

Analysis of Rental Property Trends

For the first time, in conjunction with EY, the GeoDirectory Residential Buildings Report tracks average rent prices for new tenancies, as published by the Residential Tenancies Board (RTB). The study highlighted that the average rent increased by 8.2% between Q1 and Q2 in 2022. The highest average rent price in Q2 2022 was recorded in the Dún Laoghaire-Rathdown region (€2,231), while the lowest average rent price could be found in Donegal (€783).

By examining average rental prices against the metric of 30% of a household’s gross monthly income, this analysis found that, on average, there is an affordability gap in the three largest cities in the country, with Dublin city at 27%, Cork city at 18% and Galway city at 6%.

Commenting on the findings of the latest GeoDirectory Residential Buildings Report, Dara Keogh, CEO of GeoDirectory said, “The data shows that construction activity and supply of housing stock increased significantly in 2022, but it is still lagging well behind the current rate of demand. The number of residential buildings under construction and additions to the housing stock over the past twelve months would indicate that the sector has moved past the disruption brought about by Covid-19.”

Annette Hughes, Director of EY Economic Advisory Services said, “At a national level, the residential vacancy rate of 4.0% is the lowest recorded by GeoDirectory to date. However, this figure highlights a national imbalance of low vacancy rates and high demand in Dublin and surrounding counties, contrasted by considerably higher vacancy rates in the west of the country. The report also highlights a growing affordability gap for rental properties in the country, with renters in our main cities paying well over 30% of their gross income per month in rent."

   ENDS

This report is prepared by EY Economic Advisory, which provides a full suite of economic services in the Irish market, helping both public and private sector clients understand the current and future environments they operate in, and allowing vitally-important scenario planning and decision-making.

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