BELFAST: Ireland’s construction output will decline by a cumulative 53% in the three years through 2011 as a property slump extends and the current supply of homes meets demand for the next four years, according to a report issued today.

“The most pressing problem in the residential market is the surplus housing inventory,” DKM Economic Consultants said today. The “oversupply” of homes “over and above what is considered as the normal level of vacant units is estimated at 136,000 units on average, which is equivalent to around four years of current housing demand.”

Irish house prices have fallen in every month since May 2007 and are now 24% below their peak in the early part of that year as the country remains mired in a recession that has pushed unemployment to a 14-year high. Tighter lending conditions and weakening consumer confidence are also sapping housing demand.

The value of construction output will decline 38% to 19.9 billion euros ($101.43 billion) this year and by the end of 2011 construction output volumes will return to mid-1990s levels, when Ireland’s decade-long housing boom started, today’s report showed. Output will decline 24% next year and 8% in 2011. – Bloomberg LP

 

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