Irish construction at 40-year low in 2012

A report published by the Construction Industry Federation says 2012 was a record low for house building and expects this year to be lower again. Less than 8,500 homes were built last year, the majority of which were once-off houses or the completion of unfinished estates.

Records on house building began in 1970 and just under-14,000 houses were constructed that year.

That figure was the lowest on record until last year.

Dublin, Cork and Galway recorded the highest number of house completions.

The CIF says the ESRI estimates that 15,000-20,000 new homes need to be built every year to meet future demand and there are concerns of the impact that six successive years of decline will have in years to come.

The federation says if banks keep their promise to provide more credit it could help stimulate demand, particularly in areas where vacant stock is low.

The level of construction activity mirrors almost exactly the activity in the mortgage market, where mortgage origination in 2011 were at a 40-year low. Completed 2012 mortgage statistics are due for release in the coming weeks. These are expected to show a slight increase over the 2011 figures but still represent the lowest mortgage-to-household lending levels since records began.

Bank of Ireland and Allied Irish Bank have both announced plans to significantly increase lending in 2013. Permanent TSB has also announced plans for a significant increase n lending throughout the year.

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