House completions are set to grow strongly, Goodbody Stockbrokers said in a new report on the economy.
But it will take a number of years before the number of units built matches demand, which is estimated at around 30,000 a year.
Goodbody said that greater-than-expected demand has led to it increase its forecast on house price growth.
“Mortgage approvals, even excluding cash purchases, are in excess of the amount of new supply expected to come to the market, thus house price inflation is expected to remain strong over the forecast period,” the report states.
It expects €13.5bn in new mortgage lending in the medium-term over the next few years.
Author of the report Dermot O’Leary added his voice to those questioning official house completion statistics for last year.
Official figures suggest there were 15,000 housing units finished last year.
But there were only 4,000 units transacted in 2016, according to stamp duty returns.
The finishing out of ghost estates and large numbers of self-builds, which are generally not available for sale, mean that there has been double-counting, Mr O’Leary’s report says.
“While supply remains low, demand appears to be running ahead of expectations,” the report states.