The accuracy of figures used by officials to assess the depth of the housing crisis has again been called into question by the chief economist at Goodbody after an authoritative private survey suggested a lot fewer homes were under construction than currently thought.
Dermot O’Leary said his reading of the GeoDirectory survey suggests many more houses will be required to meet demand than official targets have assumed and that the housing crisis will stretch well into the next decade.
The chief economist said he believes the number of new homes being built is closer to 10,000 at a time when 35,000 new homes a year will be needed to start satisfying demand.
A range of official data is not providing a proper tally and therefore misinforming debate about the depth of the crisis, he claimed.
“My view is that the supply numbers are overstating things in policy circles. The bottom line here is that when supply is lower and demand is higher, then the policy prescriptions need to be more aggressive,” said Mr O’Leary.
“We have inaccurate information, which is a problem. Accurate data is the bedrock to good policymaking and it doesn’t look like we have that. We are a year in from the Rebuilding Ireland programme. I did think the work that had gone into that was a good effort. But things have changed in the meantime, over the last 12 months, which means that a renewed effort is required at this stage.”
Citing census data which threw new light on the pent-up demand for housing after revealing that the average household size increased for the first time in 40 years, Mr O’Leary said other surveys were questionable.
“The accuracy of these numbers has been around for a long, long time. It is well past time for them to be resolved,” he said.
“I think we can say now, based on the information over the last couple of months, that the housing crisis is bigger and that the time it will take to get to the required number of units will take longer. The 2021 target looks very optimistic at this stage.”
Pointing to figures such as building energy ratings not being used enough, he said: “There are sizable surveys which are not mined enough. This survey of vacant homes will add to the debate.”
Some of the sources of information which could throw light on the number of new homes under construction were not being used, he said.
The latest residential buildings report, commissioned by GeoDirectory from DKM Economic Consultants, is based on 2m residential building records.
It estimates there were 1.96m homes in the Republic, but only 5,966 dwellings were under construction.
Annette Hughes, director at DKM Economic Consultants said: “As of June 2017, there were 1,967,698 residential dwellings across the Republic of Ireland. With 43,767 property transactions in the year there was a turnover rate of 2.22%; 90% of the properties transacted were second-hand dwellings. This, along with increasing property prices, suggests that a substantial increase in construction activity is very much needed.”
In the year to May, the GeoDirectory survey estimated that the turnover of homes was 43,767 transactions. The average house price in the State costs €250,188, or €175,782 when Dublin is excluded, it showed.
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