Activity in residential construction sector in mayo falls sharply

FIGURES from the National Housing Construction Index for the first four months of 2015 show a sharp fall in activity in the residential construction sector in Mayo when compared to 2014, but sentiment continues to remain positive.

The latest edition of the index from Link2Plans reveals that commencements in Mayo have fallen by 67% in the first four months of 2015 when compared to the same period in 2014, while planning applications have risen by 6% year on year.

Nationally, commencements are down 51% in the first two months of 2015, with every county recording a decrease, while applications are up 18% to 4,602.

Danny O’Shea, managing director of Link2Plans, said: “We consider the first half of 2014 to be very much an outlier in terms of construction activity on account of the structural changes in the market, which saw the introduction of new buildings regulations on March 1, 2014.

“These one-off changes in the sector created a major injection in construction activity for that period. When compared to previous years such as 2013, we do see growth in the construction sector, with the first four months of 2015 showing an increase of 11% when compared to the same period in 2013.

“When these figures are combined with the strong growth in planning applications, which have recorded increases for the past 18 months, the forecast for the medium term remains positive.”

Regarding the length of time it takes for one-off houses to get from planning application to work starting on site, Mr. O’Shea stated: “Research from Link2Plans shows that in Mayo for the first four months of 2015, the average period of time it took for one-off houses to get from the planning application stage to commencement of work on site was 75 weeks, which is a long lead-in time.”

The data contained in the National Housing Construction Index is aggregated by consultancy Link2Plans from real time planning and project information in every local authority area, with the latest edition tracking every project from January through to April 2015 and comparing it with the same period in 2014.

Meanwhile, for the country as a whole, the average asking price for a house in Ireland grew by 1.9% in the second quarter of 2015. This means that in all but one of the last seven quarters the average price has risen nationwide, although the pace of growth has slowed from an average of 5% to less than 2%. The average price nationwide is now €202,000, compared to a low of €164,000 in mid-2013 and a peak of €370,000 in 2007.

In Mayo, prices between March and June 2015 were 5% higher than a year previously, compared to a fall of 5% that was seen a year ago. The average house price is now €122,000, 10% above its lowest point.

Commenting on these figures contained in a house price report, author Ronan Lyons said: “The second quarter of 2015 saw the last of those buying under the old mortgage rules and already the Central Bank regulations about borrowing are having a clear impact not only on overall house price growth but also on the spread of house prices.”