A new report suggests that despite strong growth in the rate of new home building this year, it will likely take until 2021 before housing supply will match current demand.

The Banking and Payments Federation Ireland (BPFI)'s Housing Market Monitor for the third quarter of this year also confirmed overall growth in mortgage lending activity.  

It said the total value of drawdowns in the first nine months of the year was €6.1 billion compared to €5.1 billion the same time last year.

The report noted that first time buyers and mover purchasers accounted for around 48.7% and 32.8% of the total mortgage drawdowns in the third quarter of 2018 respectively.

It also noted that the level of approvals from lenders has also increased, amounting to €8.6 billion by the end of October compared to around €7.8 billion during the same period in 2017. 

BPFI's chief economist, Dr Ali Uğur, said that if dwelling completions were to continue their strong growth rate of around 25% in the last quarter of this year, new dwelling completions should be around 18,000 units for the full year. 

"Assuming a growth rate of around 25% per annum in the short term for completions, it would take until 2021 for supply to meet the estimated demand of around 35,000 units per annum - notwithstanding the fact that latent demand will not have been addressed during this period," Dr Uğur said.

"As long as the construction sector does not hit any significant blockages in terms of staff requirements, completion numbers are likely to be around 22,000 units in 2019 with current growth rates observed in commencement numbers," he added.