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Home completions are expected to reach 20,000 this year, Goodbody analysts forecast, as the sector rebounded from the construction shutdown triggered by Covid-19.
But house prices are expected to fall 5 percent in mid-2021, a more modest decline than previously predicted, and rents are projected to decline further, according to Goodbody Analytics BER Housebuilding Tracker.
There may also be more lasting effects from the pandemic, as home construction is significantly reduced.
Although the drop in home completion is still an 8 percent year-on-year drop, the figure is an increase from previous estimates of 16,500, driven by a recovery in the third quarter of the year. It is also the second time that analysts have increased their forecasts for housing production since the end of the first lockdown.
Goodbody Analytics BER Housebuilding Tracker said 5,500 units were completed in the third quarter, up from 3,290 in the previous three months. That brought production up 3 percent from a year earlier, Goodbody said.
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“This suggests that productivity levels have not been as affected by social distancing measures as we might have feared,” analysts said in the report.
An estimated 5,500 housing units were completed in the third quarter, an annual decrease of 3 percent, but a sharp increase from the 3,290 completed in the second quarter. (-32% year-on-year). A major drop in apartment completion was noted, an issue that may have arisen due to social distancing requirements at the sites. House plans saw a rebound in production to last year’s level.
However, there may be a more lasting impact on the housing sector from Covid-19. Home construction has slowed significantly, according to the report, falling 37 percent in the three months through August. So far this year, overall home construction is down 24 percent.
“As we noted above, this suggests that the impact of the pandemic may be more lasting, with new developments completed, but a more cautious approach taken at new beginnings, due to the caution in the funding environment market,” the report said .
An analysis of the Property Price Registry showed that the decline in new home sales was slowing, with a year-on-year drop of 18 percent in the third quarter, compared to a 40 percent decline in the second quarter of the year. year. So far this year, new home sales are down 21 percent.
But the new lockdown measures could affect sales in the coming weeks, Goodbody warned, even though visits continued and construction sites remained open.
The report also projects a 5 percent drop in home prices and a steeper drop in rents, as continued measures to slow the spread of the pandemic led to an increase in working from home.
Mortgage loans are also expected to decline in 2020, falling 20% before recovering to grow 9% in 2021.
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