Dublin Opinion

This are now serious and empirically-based questions about the decision by the Government to overpay for property which will be bought by NAMA in an attempt to create a ‘floor’ for house prices.

According to this newspaper item published today:

Over 300,000 homes - more than double the official estimate - are lying empty around the country, academics claimed today.

The scale of vacant housing - equivalent to half of all homes in Dublin - could be enough to meet demand for years to come.

The figure was calculated by the National Institute of Regional and Spatial Analysis (Nirsa), based at NUI Maynooth, which advises the Government.

It is more than twice the estimate from Minister for Housing Michael Finneran, who last week told the Cabinet there were between 100,000 and 140,000 houses lying empty. The construction industry suggested the true figure was 40,000.

Professor Rob Kitchin, director of Nirsa, said he decided to accurately calculate the extent of empty housing because official figures do not exist.

Over at Ireland after NAMA, Justin Gleeson and Rob Kitchin provide some of the analysis behind the findings:

The average housing vacancy rate in Ireland, as reported in the 2006 Census, was 12.5%, which consisted of 216,533 units – 174,935 houses and 41,598 apartments (the vacancy rate rose to 15% if it included holiday homes). The pattern of vacancies varied from 9.5% in Dublin up to 21.4% in Leitrim (or 9.5% in Dublin and 29% in Leitrim if holiday homes are included – see the map we posted here). Let’s assume that 10% of these properties are no longer vacant (which seems reasonable given the vacancy rate has been climbing not falling, and the market first softened then dropped markedly from the end of 2006) meaning that 194,880 still are.

In 2006 there were 93,419 housing completions – some of these would have been captured in the Census (undertaken in April 06) but we’re assuming two thirds were not, some 60,700 units. 78,027 properties were built in 2007, 51,724 in 2008 and an estimated 25,000 were completed in 2009 (there were 14,279 units completed in Q1+Q2 2009 and we’re assuming a slow down in the latter part of the year). That gives us a total of 215,451 houses built between April 2006 and Dec 2009. Given our ghost estate figures from last week we estimate that about 50 percent of these properties are occupied. If that’s the case then 107,725 are vacant.

As regular readers of Dublin Opinion may know this follows on from finding that Conor made in 2007 based on the 2006 Census:

Almost 22% of housing units in Leitrim, according to the 2006 census, are empty. Hardly surprising, given the fact that from 2002 to 2006 there were 4,648 housing units built, yet the household numbers increased by 1,547.

And its very good that Rob Kitchin and others at Nirsa are providing the comprehensive evidence. Otherwise we would be forced to trust people like John Fitzgerald of the ERSI for what is happening and that wouldn’t be good at all.

This is from a piece published in the Irish Independent in November 2006 called “Ireland’s empty house hangover”:

In the current debate over the future of house prices, a key factor which seems to have got lost is the question of supply and demand. While economists raise scare stories about the likely effects of higher interest rates on the market, they seem to forget that even when mortgage rates were double current levels, people still bought homes

DEMAND for housing in the new homes market is still underpinned by two key elements: tens of thousands of young Irish people in the 20-35 age group; and tens of thousands of immigrants of a similar age. A few commentators have suggested that some of this demand could easily be met from a mysterious overhang as shown by the Central Statistics Office (CSO) in its analysis of the recent census of population figures.

This analysis showed that as many as 265,000 homes were vacant last April - an increase of 94,000 on the vacancy level disclosed in the 2002 census.

However a call to the CSO revealed that a substantial portion of these homes are under construction. Another substantial portion are holiday homes. Precise figures won’t be available until next April.

Professor John FitzGerald undertook an analysis of the vacant homes in the 2002 census figures and found that holiday homes accounted for more than 104,000 of them and that in many western counties holiday homes accounted for around 20% of housing stock.

At the time of his analysis some commentators expressed concerns that as many as 39,000 Dublin homes were vacant. However most of these were holiday homes and it is understandable that not all of them would be occupied in the off-peak period of early April when the census was taken.