Housing completions are set to hit their lowest ever level this year.
That’s according to the Central Bank in its quarterly bulletin report.
The report found that construction now accounts for less than 6% of economic output – down from the peak of 15% in 2007.
The Central Bank said it expects house completions this year to fall to around 8,000 units – the lowest figure ever recorded.
It said the available evidence suggests that commercial property activity may have bottomed out, with little new work expected to commence on office and factory units.
With the foreign direct investments already announced, the Central Bank said the balance between supply and demand in the commercial property sector may begin to erode the overhang of empty properties.
It said the property tax changes announced in the budget are unlikely to result in new construction activity, but may help a return to activity in the medium term.
The bank also noted that credit conditions for consumer loans tightened, forcing consumers to save for longer before buying big ticket items. It said that high oil prices and budget measures such as carbon taxes increases and education costs will further erode real purchasing power this year.