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Irish housebuilder Glenveagh sees "huge" demand as mortgage approvals rise

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DUBLIN (Reuters) - Irish housebuilder Glenveagh Properties said on Friday it is seeing huge demand for new homes, as data showed that mortgage approvals in Ireland rose in January despite the country being back in a strict COVID-19 lockdown.

Glenveagh, which chiefly builds homes in and around Dublin, reported an operating loss for 2020 of 12.7 million euros compared to a profit of 29.4 million euros a year earlier after building sites were shut due to COVID-19 restrictions during one of its usually most productive times of the year.

However, it said there has been a limited impact on housing demand as the pandemic has disproportionately hit younger, low income workers and led to a record spike in savings among those still working.

As a result Glenveagh has seen an increase in deposit levels in recent reservations from its purchasers, whose average age is now 36 versus 29 a decade ago.

WATCH: How much money do I need to buy a house?

"The continuing demand for new homes is very striking. We're seeing increased forward sales, strong growth in customer leads and a 30%-plus increase in average weekly private reservations compared to a year ago," Glenveagh Chief Executive Stephen Garvey said in a statement.

With supply still far below the level needed to meet demand, Irish house prices recently rose at the fastest annual rate in 17 months. Glenveagh said on Friday that its starter-home suburban prices rose from being marginally positive in the first half of 2020 to 3% higher in the second half.

Data from the Banking & Payments Federation Ireland on Friday showed that mortgage approvals rose by 2.8% year-on-year by volume in January and by 10.7% in value terms.

Research from Davy Stockbrokers on Thursday also showed that housing transactions so far in 2021 were down just 2% year-on-year despite the ongoing lockdown and that its forecast for 13% mortgage market growth this year may be too pessimistic.

Neighbouring Britain's housing market is also shaking off the challenges created by the pandemic, Rightmove, which runs the UK's largest online real estate portal, said on Friday.

WATCH: Am I wasting my money by renting?

(Reporting by Padraic Halpin; Editing by Susan Fenton)

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