Supply of new homes may be 75% less than official figures suggest, claims expert

The supply of new homes in Ireland may be up to 75 per cent less than the official figures suggest, a leading housing expert has claimed.

Lorcan Sirr from the Dublin Institute of Technology (DIT) said while 12,666 new homes were completed last year the State's housing stock, as measured by the Central Statistics Office, only increased by 6,282.

The anomaly is explained by the number of existing homes becoming derelict or being taken over for reconstruction, he told the annual policy conference of the Dublin Economics Workshop in Wexford last night.

Dr Sirr also highlighted that the official completion figures were calculated using ESB connection data, which is prone to a 20 per cent margin of error, meaning the real increase in the State's housing stock may have been as low as 3,738 in 2015.

This is barely 15 per cent of 25,000 needed to meet supply and may explain why the current housing crisis has become so acute.

“Even though we think we’re building a certain number of houses we’re actually only adding a fraction of this amount to the existing housing stock,” he said.

“This is because we’re not managing our existing supply well, and we’re letting a lot of them fall into dereliction.”

In his address, Dr Sirr assessed the causes of demand in the Irish market, which he claimed was rarely examined with any rigour.

He noted that changing family structures with people staying single longer and more people getting divorced were driving a lot of the new demand.

The solution

He said the State needed an additional 70,000 homes just to cope with the increase in population over the last five years.

“When we talk about supply being the solution we need to understand what causes the demand in the first place,” he said.

Also addressing the conference David Dumigan of US property investment firm Hines said Ireland's housing crisis would not be resolved until the costs of construction came down.

He said his firm had calculated that construction costs here were on average 35 per cent higher than in other European countries. This acted as a barrier to building houses and undermined the viability of “big volume apartment developments”, which he said described as “the big weapon” in tackling the current crisis.

Hines is currently developing 400 acres on Cherrywood site in south Dublin with planning approved for 3,000 apartments and 1,200 houses, making it one of the biggest housing projects in the State.

Mr Dumigan said without the recent changes to the building guidelines, allowing for smaller apartment sizes, the project would not have been viable.

Jason Cronin from project management firm Virtus, said strict planning codes as well as an elitist planning standards were the cause of high costs here.