vacant homes

Irish Housing Market 2005 to 2013 – mortgages, building and home sales

Housing Market

Housing figures released from the Department of Environment, Community and Local Government reveal that in Ireland, there were 8,301 homes built in 2013 (7,379 houses and 922 apartments) which is a decrease of 91.1% from 2006 levels of 93,419 homes completed. The 2013 figures, as shown in the link above, represent a decrease of only 2.2% from 2012 numbers which is not as bad as certain commentators were predicting.
In the UK in 2006 there were around 188,000 home completions which are just over twice the Irish number of 93,419. Assuming the UK population at the time was exactly 13.5 times more than the Republic, what happened here with irresponsible house construction would have been like the UK building over 1.2 million homes in 2006. In other words Irish home building in 2006 was, per capita, 6.7 times more than in the UK.
The statistics from the Irish Banking Federation (IBF) show that new mortgages (not including re-mortgages and top ups which don’t affect the housing market) in 2006 remained broadly the same from 2005 levels, while the numbers for home completions in the same period actually increased by 15.4%.
Unfortunately there are no statistics available for the number of home sales that occurred during the boom years so we are only left to speculate as to how many home sales there were compared to the 110,000 or so new mortgages given out in 2005 and 2006 (i.e. how many cash buyers there were).
Thankfully the new Residential Property Price Register gives a more accurate picture of the mortgage market since 2010. The figures from this database, when compared with new mortgage data from the IBF, can now give us accurate figures for cash buyers as a percent of the market (54% for 2013 compared to 12% for 2010).
The statistics for home completions as shown in blue in the graph have been available since 1970 and the IBF statistics have been around since 2005, obviously meaning that compiling such a graph from the 3 sources would not have been possible until recent years.
The IBF claim that their statistics represent more than 95% of the mortgage lending market in Ireland so there is a small amount error possible.
Also there may be a few duplicate entries in the property database and every time it is updated, the years 2010 – 2012 sometimes adjust by 1 or 2 entries. The property database is based on stamp duty payments so it should be very accurate because if you don’t pay the stamp duty, you don’t own your new home.
It’s worth pointing out that statistics for home completions are based on new ESB connections.
Most people in Ireland are well aware that there is plenty of talk as to how many homes should be built here.
Assuming we proportionally need the same number of new homes as the 2006 UK figure of 188,000, then over 13,500 homes would need to be completed every year compared to 8,301 (so around 5,000 more than current levels). There is one huge issue in this country, among others, that would contradict the assertion that we need such an amount of new homes built – the issue that in the census of 2011, there were around 230,000 vacant homes in the country which I will write about in my next post.