Real Estate: IRELAND ” It’ll take us 43 years to fill all empty houses “
200,000 homes may need to be bulldozed — bank
By Nick Webb
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”.
– Nick Webb
It is my understanding the Ireland was always treated as a colony and that the majority of the land is owned by approx. (6) family corporation.
When we kept hearing about the Irish Miracles….the Celtic Tiger…..I was most certainly suspicious. However, not that the Irish aren’t capable of doing great things, but that they were equal with the rest of us.
What usually happens is that Gov’ts start to sell out their own country with tax breaks etc. They are not creating new business, simply poaching it from elsewhere……its a “shell gam” meets “ponzi scheme”. Ireland is simply another European Country that got raped and pillaged by the corrupt banking system, and another warning to Canada, and moreso here in BC.
Demolishing completed homes is a stupid idea…it is wasteful. Surely there is a better way. Regardless it is an indictment on Gov’ts who simply cannot think long term and only focus on the short term and never assessing the probable consequences.