The rising share of apartments in new housing developments could impact the speed of housing delivery this year, Banking and Payments Federation Ireland (BPFI) has warned.
The federation said this is because apartment developments require longer completion times than houses.
It said this issue appears to be behind a 9% drop in the completion rate of new housing in the first half of the year.
"The majority of this decline is accounted for by the decrease in apartment completion," said the chief executive of BPFI, Brian Hayes.
"While the proportion of apartments being built has risen in recent years, increasing from 16% of all completions in 2019 to over 35% in 2023, they take longer to complete compared to housing schemes so we may see delays in the expected increase in total housing units completed in 2024."
Despite this issue, BPFI said demand for homes does remain robust.
"While we've seen a slight slowdown in mortgage activity in the first half of 2024, demand for home purchases remains robust with 49,384 mortgage approvals in the twelve months ending July 2024," said Mr Hayes.
"Almost 31,000 of these approvals were for first-time buyer (FTB) mortgages, the highest annualised levels since the data series began in 2011."
The latest BPFI Housing Market Monitor also shows the average loan to value (LTV) for a first time buyer mortgage last year was 86% and 68% for a second and subsequent buyer mortgage.
"These are similar to the levels observed in 2019 prior to the pandemic," said Mr Hayes.
"However, during this period, as average house prices have increased, the average deposit amount provided by home buyers has also increased, which raises the question of how people are meeting these rising deposits."
BPFI said some of the rise may have been met through savings, with the Help to Buy scheme another source.
"In addition, our survey published today shows that 38% of Irish adults have received a substantial gift or inheritance and approximately one third (34%) of those used it to help them buy or build their own home," Mr Hayes said.
"This means that nearly 13% of Irish adults have used a gift or inheritance to help them buy or build their own home."
The federation said it expects output to rise in the second half of the year, with the level of completions due to be at or above the 32,695 recorded last year.
"In addition, commencement activity points to a further increase in output in the short term, although with the share of apartments increasing, it is likely that we may see delays in the expected increase in total housing units," Mr Hayes said.
