Sir, – John McCartney (“Ireland has many housing problems. But lack of supply isn’t one of them”, Opinion & Analysis, June 27th) argues that undersupply is not a feature of the Irish property market, on the basis that Census 2022 shows an overall home vacancy rate of 7.85 per cent. Census data is notoriously unreliable as a source of actual property vacancy figures, as the only criterion is that nobody is home on census night. Official CSO vacancy figures are based on low or zero electricity consumption over a 12-month period and are a much more reliable indicator that homes are being left unoccupied for long periods.
Figures released by the CSO earlier this year and published in The Irish Times (“Leitrim has highest home vacancy rate in State, CSO data shows”, News, January 31st, 2023) showed that national vacancy rates fell from 4.9 per cent at the start of 2016 to 4.3 per cent at the end of 2021. Vacancy rate is not evenly distributed. Urban vacancy rates (accounting for about 62 per cent of the population) are just 2.9 per cent, versus a rural vacancy rate of 7.5 per cent. The lowest levels of vacancy can be seen around Dublin, along the east coast and around the cities of Cork, Limerick, Galway and Waterford, where vacancy rates go as low as 1.4 per cent.
By Dr McCartney’s own definition, a healthy property market should have a vacancy rate around 5.75 per cent. With vacancy rates in all of the primary residential locations in Ireland less than half of this target, CSO figures suggest that undersupply is indeed a very significant feature of Ireland’s housing problems.
Dr McCartney’s other evidence is that sales prices appear to be levelling off, supposedly meaning that supply is now meeting demand. However, unlike many other commodities, property prices are not only based on the current levels of supply and demand, they are based on the availability and affordability of long-term credit, and many other complex social and economic factors. With interest rates rising and economic uncertainty increasing since the invasion of Ukraine, it is no surprise that people are less likely to choose now as the time to take out a large mortgage, even if they qualify for one.
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Evidence of undersupply is also visible in the average household size, which was 2.75 in Ireland in the 2016 census, well above the EU average of 2.2. This suggested that more people are living in shared accommodation than would be the case if appropriate housing was available - adult children living with parents, working adults sharing housing with strangers, etc. It will be interesting see what if this figure increased further in the 2022 census.
An alternative gauge of “undersupply” data might the number of homeless, which indicates the number of people unable to find and/or afford housing of any kind.
According to Focus Ireland, this figure is triple what it was in 2015. A quarter of these are children. – Yours, etc,
JOHN THOMPSON,
Phibsboro,
Dublin 7.