Nearly 27,000 new housing units will be delivered this year, new figures from Banking and Payments Federation Ireland (BPFI) suggest.
The latest BPFI housing market monitor shows that housing supply recovered significantly last year after lower-than-expected output in 2020 and 2021 due to the pandemic.
Almost 30,000 new homes were completed last year, up 45% on 2021 and 41% on 2019.
Today's figures show that activity was very strong in the last quarter of 2022 with 9,148 completions.
Dublin experienced the greatest rise in completions last year, at 65.1%, most of which was accounted for by apartment completions.
The data shows that apartment completions accounted for over 30% of all completions last year and these completions increased by around a third during the year, whereas scheme completions accounted for just over half of all completions.
The number of apartments completed in 2022 was greater than the number of apartments completed in the previous two years combined.
According to BPFI, commencement figures for the previous year give a good indication of expected completions for the following year.
Nearly 27,000 housing units were commenced last year, similar to the levels in 2019 pre-pandemic.
The data shows that commencement figures for this January were positive, with 2,108 housing units started during the month - the highest level recorded in any January period since 2008.
The recovery in housing supply last year was also reflected in activity in the mortgage market.
There were 52,634 mortgage drawdowns valued at €14.1 billion in 2022 - the highest level of drawdowns since 2008.
There was a significant increase in switching activity last year, which accounted for nearly 28% of all drawdowns compared to 14% in 2021 in volume terms.
Meanwhile, the latest data on the Help to Buy (HTB) scheme, which supports First Time Buyers (FTBs) buying or building new homes, shows that in January 2023 alone there were more than 7,000 applications to the scheme.
This is 36% higher than the year previous, the most observed in any January since the launch of the scheme, and larger than the total number of claims in the whole of 2022.
However, today's report states that robust housing and mortgage activity in 2023 may be tempered by building cost pressures and interest rate increases in short to medium term.
"Following a strong year in terms of housing and mortgage market activity in 2022, we anticipate robust levels of activity to continue in 2023, however this is not without some downside risks," said Brian Hayes, Chief Executive of BPFI.
"In terms of demand for mortgages, we expect the growth in non-purchase mortgages (switching and top-ups) to continue to slow and the first-time buyer segment to drive activity, especially for new builds, with the continuation of support measures like the Help-to-buy scheme and the First Home Scheme, as well as the revised loan-to-income ratios under the Central Bank's mortgage lending rules.
"And while the slowdown in residential property price inflation should help to alleviate affordability concerns somewhat, especially for first-time buyers, building cost pressures and further ECB rate increases may pose some risk to the housing supply outlook and mortgage demand in the short to medium term," he added.