Government playing fast and loose with house statistics

Experts claim use of house completion numbers exaggerates level of supply

The Department of Housing uses electricity connections as a proxy to measure house completion rates, which is valid. But house completions are not the same as new builds. Photograph: Chris Ratcliffe/Bloomberg
The Department of Housing uses electricity connections as a proxy to measure house completion rates, which is valid. But house completions are not the same as new builds. Photograph: Chris Ratcliffe/Bloomberg

There’s no way of getting round the fact that the Government is misleading the public as to the level of house building going on in the economy.

By continually trotting out house completion numbers – 15,000 last year, 18,000 expected this year – Ministers are effectively exaggerating the recovery in construction and the true level of supply.

No doubt, this is politically advantageous given the public outcry over housing shortages and ballooning rents, but it has experts tearing their hair out.

The Department of Housing uses electricity connections as a proxy to measure house completion rates, which is valid. But house completions are not the same as new builds, and this is where the problem lies.

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The difference between the two metrics reflects the fact that new electricity connections can be triggered by work to existing buildings or by formerly vacant units coming back on stream.

Perhaps more relevant to Ireland is that house completion numbers also include recently completed but unoccupied Nama developments and former ghost estates. Counting these as new builds paints a misleading picture of what's actually going on.

Truer measure

To illustrate the point, last year house completions hit nearly 15,000 and are expected to rise to 18,000 in 2017, closer to the 25,000 targeted in the Government’s housing action plan.

According to the experts, however, the number of new homes built last year, arguably the truer measure of supply, was less than 8,000, barely one-third of the Government’s target.

The Government is using the former measure despite the fact it is being confused in the public’s mind with house building rates.

The absence of accurate housing/property price indicators is nothing new. During the boom, we had a coterie of estate agents, hardly disinterested parties, publishing property price indices.

After the crash, it fell on the shoulders of the Central Statistics Office, but it took until last year before we had a measure that took account of cash buyers, which represent nearly half the market.

The Department of Housing could collate accurate numbers for the level of new builds here via the new Building Control Management System register but with building rates remaining so low, it appears to have avoided that option, perhaps fearing what the results would show.