Irish housing starts surge to 17,600 in April - report

DUBLIN, May 14 (Reuters) - Irish builders issued a record 17,600 commencement notices for new homes in April, six times last year's monthly average, a Goodbody analysis of uncollated industry data showed on Tuesday.

WHY IT'S IMPORTANT

Housing has been the number one political issue for years in Ireland. A severe shortage of affordable housing has pushed rents to record highs with house prices growing at a rate of 6.1% year-on-year, despite a jump in borrowing costs.

While new house completions recovered to a 15-year high of almost 33,000 units last year, builders and analysts say that closer to 50,000 homes are needed a year to meet demand as the economy and population grow strongly.

CONTEXT

The government last month extended a temporary waiver on the levy homebuilders are obliged to pay local authorities until the end of the year, its latest direct intervention in the market.

Goodbody said the surge that took the number of commencement notices in the 12 months to April to 52,500 was due to the fact that the extension was confirmed just before the waiver was due to expire.

KEY QUOTE

"We are sceptical that these commencements will translate into 50,000 annual completions. It appears that there was little downside for builders to issue commencement notices, but it remains to be seen what proportion will indeed be built out," said Goodbody chief economist Dermot O'Leary.

"Under the terms of the waiver and rebate, the units have to be completed by the end of 2026, so the lag between commencement and completion may be elongated."

BY THE NUMBERS

The commencements data over the last 12 months is made up of 25,000 housing scheme units, 22,000 apartments and 6,000 one-off units, Goodbody said. The housing ministry is due to publish commencement data for April later this month.

(Reporting by Padraic Halpin, editing by Ed Osmond)