One third of new homes unsold as slowdown hits
One third of new homes unsold as slowdown hits 17 February 2008 By David Clerkin, Markets Correspondent One third of the 170,000 new homes added to the Irish market over the past two years have not been sold, according to an analysis of new figures by The Sunday Business Post. Figures released last week by the Irish Banking Federation (IBF) showed that new entrants to the housing market took out 116,000 mortgages in 2006 and 2007.The total number of new homes completed over the same period stood at more than 171,000, according to figures from the Department of the Environment. The IBF statistics also showed the number of first-time buyers entering the market fell by 40 per cent between the last quarter of 2005 and the last quarter of 2007. Just 6,850 mortgages were issued to first-time buyers between October and December last. The number of investor loans fell by 34 per cent over the same two-year period. Dermot O’Leary, chief economist with Goodbody Stockbrokers, said some of the shortfall of 55,000 was likely to have been bridged by new homes that were built to replace existing units, but estimated that figure at no more than 9,000 units per year. He said that a small number of houses may have been paid for in cash, without the buyer taking out a mortgage. O’Leary said recent data from property website Daft.ie showed that there were enough second-hand homes up for sale to satisfy at least 12 months’ worth of demand. The typical level of supply in the US over a 25-year period was just 7 months, he said.
One third of new homes unsold as slowdown hits 17 February 2008 By David Clerkin, Markets Correspondent One third of the 170,000 new homes added to the Irish market over the past two years have not been sold, according to an analysis of new figures by The Sunday Business Post. Figures released last week by the Irish Banking Federation (IBF) showed that new entrants to the housing market took out 116,000 mortgages in 2006 and 2007.The total number of new homes completed over the same period stood at more than 171,000, according to figures from the Department of the Environment. The IBF statistics also showed the number of first-time buyers entering the market fell by 40 per cent between the last quarter of 2005 and the last quarter of 2007. Just 6,850 mortgages were issued to first-time buyers between October and December last. The number of investor loans fell by 34 per cent over the same two-year period. Dermot O’Leary, chief economist with Goodbody Stockbrokers, said some of the shortfall of 55,000 was likely to have been bridged by new homes that were built to replace existing units, but estimated that figure at no more than 9,000 units per year. He said that a small number of houses may have been paid for in cash, without the buyer taking out a mortgage. O’Leary said recent data from property website Daft.ie showed that there were enough second-hand homes up for sale to satisfy at least 12 months’ worth of demand. The typical level of supply in the US over a 25-year period was just 7 months, he said.