The level of new house completion fell to pre-1970 historic lows in 2011, according to official figures and could fall even further this year, according to the latest AIB House Market Bulletin.
The latest data from the Department of Environment show that there were just 10,480 housing units completed in 2011, a fall of 28% compared to the 14,600 units completed in 2010 and the lowest level of output since records began in 1970.
Completions are measured by connections to the ESB network, and incorporate the finishing out of work that has been in progress for some time as well as new construction activity.
John Beggs, chief economist with AIB said a good indication of the level of this new construction activity is given by commencement notices, which are required for all new housing, apart from local authority direct builds.
Only 4,380 units were commenced in 2011, with the seasonally adjusted annualised rate dropping to just 3,260 by Q4 last year.
This compares with over 75,000 units commenced in each of the three years from 2004 to 2006, at the height of the building boom.
Mr Beggs said that the very depressed levels of new activity, by developers in particular, would indicate that output will fall even further this year. Even on the basis of a further finishing out of work commenced in earlier years, we are forecasting that only 8,000 units will be completed in 2012.
“This is well below our estimate of potential demand of around 20,000 units p.a., after allowing for continuing significant emigration, suggesting there should be a slow erosion of the supply overhang of unoccupied properties.”