Skip to main content

It'll Take 43 years To Fill Empty Houses...

200,000 homes may need to be bulldozed -- bank

AN explosive report has claimed that Ireland has so many empty houses that it would take up to 43 years to fill them all.

Deutsche Bank figures suggest that there are 289,451 empty houses in Ireland, including almost 60,000 vacant holiday homes. This represents a vacancy rate of 15 per cent. As the Deutsche Bank map shows, the empty properties are highly concentrated around the Atlantic coast with Kerry and Donegal particularly badly afflicted.

This glut of empty homes will have a major impact on future property prices.

"Demand for housing is the key factor as to how long it will take for this oversupply to be reduced, and aside from demand for second homes the key driver should be population growth," Deutsche Bank notes. Based on 2011 figures which showed population growth of just 13,000, and the average number of residents per house, the bank estimates that it could take until 2055 for the glut of houses to be worked through.

The report says that if current population trends are sustained, housing oversupply will take 43 years to clear (this excludes holiday homes from unoccupied houses in the calculations). If holiday dwellings are included in calculations, the oversupply will take 57 years to clear.

However, the 2011 population growth figures were well below the levels seen over the previous decade. But such is the scale of vacant property that even at pre-crisis, boom-year population growth levels it would take almost 10 years to clear the backlog. And this is before taking into account developments which may subsequently be completed, and houses which are still being built -- 10,480 in total in 2011.

Our vacancy rate of 15 per cent is almost five times greater than in the UK. The average vacancy rate in England is 3.2 per cent, with 719,000 empty homes out of 22.8m.

"Barring a sudden and sizeable recovery in Irish net migration, or a politically controversial policy of demolishing large volumes of excess housing stock, housing oversupply will remain a feature for many years, possibly decades, to come," says Deutsche.

"This has ramifications for any bank with development loan exposure, and also for the mortgage market, where prices have continued to fall and oversupply makes any reverse of this trend unlikely in the near term.

"Over 200,000 houses would need to be demolished in order for the housing supply to fall to three years of current population growth."

Nama announced last month that it would spend around €2bn to complete unfinished commercial and residential developments around the country. It indicated that some greenfield sites would also be built "in anticipation of future supply shortages in some market segments". This would create 25,000 jobs in the construction sector, according to Nama chairman Frank Daly.

In April 2010, Nama boss Brendan McDonagh told the Oireachtas Public Accounts Committee that the state agency would consider bulldozing properties in certain circumstances, but that this would not be the "first option".

Report Nick Webb - Sunday Independent
 

Popular posts from this blog

Ireland's Celtic Tiger Excesses...

'Bang twins' may never get to run a business again... POST-boom Ireland is awash with cautionary tales of Celtic Tiger excesses, as a rattle around the carcasses of fallen property developers and entrepreneurs will show. Few can compete with the so-called Bang twins for youth, glamour and tasteful extravagance. Simon and Christian Stokes, the 35-year-old identical twins behind Bang Cafe and exclusive private members club, Residence, saw their entire business go bust with debts of €9m, €3m of which is owed to the tax man. The debt may be in the ha'penny place compared with the eye-watering billions owed by some of their former customers. But their fall has been arguably steeper and more damning than some of the country's richest tycoons. Last week, further humiliation was heaped on them with revelations that even as their businesses were going under, the twins spent €146,000 of company money in 18 months on designer shopping sprees, five star holidays and sumptu

Property Tycoon's Dolce Vita Ends...

Tycoon's dolce vita ends as art seized... THE Dublin city sheriff has seized an art collection and other valuables from the Ailesbury Road home of fallen property developer Bernard McNamara. The collection will be sold to help pay his debts. The sheriff, Brendan Walsh, is believed to have moved against the property developer within the past fortnight, calling to his salubrious Dublin 4 home acting on a court order to seize anything of value from his home to reimburse his creditors. The sheriff is believed to have taken paintings from the family home along with a small number of other items. The development marks a new low for Mr McNamara, once one of Ireland's richest men but who now owes €1.5bn . The property developer and former county councillor from Clare turned the building firm founded by his father Michael into one of the biggest in Ireland. He is the highest-profile former tycoon to date to be targeted by bailiffs, signalling just how far some of Ireland's billionai

I fear a very different kind of property crash

While 80% of people over 40 own their own home just a third of adults under 40 do. This is disastrous for social solidarity and cohesion Changing this system of policymaking requires a government to act in a way that may be uncomfortable for some. Governments have a horizon of no more than five years, and the housing issue requires long-term planning. The Department of Public Expenditure and Reform was intended to tackle some of these problems. According to its website its remit is to “drive the delivery of better public services, living standards and infrastructure for the people of Ireland by enhancing governance, building capacity and delivering effectively”. So how is the challenge of delivering homes for people in 2024 and beyond going to be met? The extent of the problem is visible in the move by companies, including Ryanair, to buy properties to house staff. Ryanair has, justifiably, defended its right to do so. IPAV has long articulated its views on how to improve supply an