Build-to-rent growth is reducing the supply of homes that are available for purchase

But the mix of types has changed dramatically, with apartments now accounting for almost a third of new construction, according to the National Statistics Office.

According to Goodbody, the apartment building grew 82 percent in the first quarter compared to the same period in 2020 before the pandemic, due to mutual fund demand for rental units.

This has displaced traditional single-family homes, which are preferred by buyers, meaning new home prices are likely to continue to rise due to the lack of supply.

“We expect 25,000 units to be built this year, but with important ownership shifts,” said Goodbody chief economist Dermot O’Leary.

“Residential, mostly for the rental sector, will account for almost 30 percent of completions, while the public sector will also account for an increasing share.

“As a result, the supply of owner-occupiers will stagnate or possibly even shrink this year if demand from first-time buyers remains high.”

Mr O’Leary said planning permission data showed the ratio of apartments to houses will increase in the coming quarters as developers respond to national planning preferences for higher density development.

Nearly 5,800 new homes were completed in the first three months of the year, up 45 percent year-on-year and 15 percent more than in the first quarter of 2020 before the pandemic, the CSO said.

That brought the four-quarter running total to more than 22,000 units — far below Goodbody’s estimated annual demand of 35,000.

Dublin completions doubled, driven by a massive increase in residential buildings, which accounted for 85 percent of the national total.

The surge in construction activity has still not been enough to cool an overheated housing market that is generating record profits for homebuilders.

Ireland-listed home builder Glenveagh announced on Thursday that it will launch another €75 million share buyback.

The latest buyback is the third in the last 12 months and has provided Glenveagh shareholders with a return on total assets of approximately €265 million.

The company said rising property prices are still offsetting rising material costs, which are expected to rise 6 percent this year.

Glenveagh is on track to deliver 1,400 suburban homes in 2022, with 1,120 units (80 units) already sold, signed or reserved, the company said in a trade update.

Just this week Glenveagh announced the sale of its residential high-rise property on East Road in Dublin’s Docklands for 63 million euros to investor Eagle Street.

“We maximize capital efficiency by allocating capital to the market segments where we can have the greatest impact and by returning excess capital to shareholders,” said Chief Executive Stephen Garvey.