Builders need to provide housing stock at a price point that is affordable for first time buyers, according to Goodbody's chief economist.

Dermot O'Leary was commenting on figures published by Goodbody on housing completions.

They show that there was a slowdown in completions in the second quarter of 2019.

"The figures suggest that builders are producing homes at a price point that the population is not able to afford," Dermot O'Leary said.

"We brought down our forecasts for completions for this year by 1,000 to 21,000 on the back of an increased stock of unsold homes. Builders reacted to that six to nine months ago after a weak second half last year," he explained.


The data paints a complex picture with different parts of the market moving at different paces and over a wide geography.

"The high end market in Dublin for new homes - over €500,000 - fell by over 20% in the first half. If you look at the €325,000 to €400,000 bracket in Dublin, sales rose by over 10%," the economist said. 

"If builders are able to produce homes at a price point that is affordable to the general first time buyer, they will sell," he stated.

Mr O'Leary explained that affordability was being defined by the Central Bank lending regulations where individuals can only borrow up to 3.5 times earnings and must have a deposit of 10%.

He said the estimate of a requirement of 30,000 to 35,000 completions every year was accurate, but with the right stock of housing types.

"Affordability is crucial in producing and selling stock. We have a big debate about the help-to-buy scheme. It's a demand led stimulus. It's probably too high at the high end price point.

"Bringing that down to €400,000 instead of €500,000 would incentivise builders to produce units at prices that people can afford," he concluded.