Official figures to be published next week will show that the number of new homes built in 2001 was even higher than the record of 50,000 in the previous year, The Irish Times has learned.
The figures, which will take many observers by surprise, show that housing output increased to nearly 52,000 units last year - a rise of almost 4 per cent - at a time when the construction industry was claiming a major downturn.
In Dublin city and county, overall completions rose by just 1 per cent, but the number of apartments increased by 30 per cent as a proportion of the total. Within the city, this category of housing increased its share of completions by 39 per cent.
The construction industry successfully lobbied the Government to reinstate mortgage interest relief for investors in the Budget on the basis that Homebond guarantee registrations were down last year, indicating a fall in housing output.
However, Dr Peter Bacon, principal author of three major reports on the housing market, said yesterday that the industry's "aggressive lobbying may have panicked the Government" into reversing its policy of not favouring investors.
He said the industry had become accustomed to making enormous profits in recent years and had a vested interest in seeing this continue, even in a situation of falling demand. Previously, it had accepted the cyclical nature of its business. "They painted a desperate scenario and it worked," he said. "They were saying that output was falling whereas in actual fact it was up."
This was known even before the Minister for Finance, Mr McCreevy, introduced his Budget.
"This raises a political issue. If the Government claims credit for having delivered in excess of the magic figure of 50,000 completions for the second year in succession, somebody will ask why Charlie McCreevy reintroduced mortgage relief.".
Dr Bacon suggested that the discrepancy between Homebond registrations, which fell by almost 17 per cent, and actual housing output could be explained by a significant volume of unsold stock, which could have been as high as 10 per cent. There was also a further increase in the number of "one-off" houses in the countryside, which are generally not registered with Homebond.
Mr Tom Corcoran, assistant secretary in charge of the Department of the Environment's housing division, said last night that he was both pleased and surprised by the figures for last year. However he noted that the number of housing starts was down.
While discounting Dr Bacon's view that unsold stock was a major factor, he said it was clear that a large number of potential purchasers were waiting for inflated prices to fall, as they did in the third and fourth quarters of last year.
The other good news is that rental values are likely to fall, according to Dr Bacon. "The market at the moment is being supported since the Budget by investors coming back into the market, basically taking out the stock that's there."
The Minister for the Environment, Mr Dempsey, said last night that the implementation of part five of the Planning and Development Act 2000 would mean that "affordable homes" would have to be made available on all new estates.
