Article: NIRSA Study concludes over 300,000 vacant properties nationwide

The_Conductor

http://www.irishtimes.com/newspaper/breaking/2010/0119/breaking59.htm

Over 300,000 homes - more than double the official estimate - are lying empty around the country, academics claimed today.

The scale of vacant housing - equivalent to half of all homes in Dublin - could be enough to meet demand for years to come.

The figure was calculated by the National Institute of Regional and Spatial Analysis (Nirsa), based at NUI Maynooth, which advises the Government.

It is more than twice the estimate from Minister for Housing Michael Finneran, who last week told the Cabinet there were between 100,000 and 140,000 houses lying empty. The construction industry suggested the true figure was 40,000.

Professor Rob Kitchin, director of Nirsa, said he decided to accurately calculate the extent of empty housing because official figures do not exist.

Along with colleagues, he used Ireland’s national address database - the GeoDirectory, the 2006 Census and Department of Environment figures based on ESB connection points.

They concluded that 302,625 houses are not inhabited, including properties for rent or for sale, homes not on the market for various reasons as well as abandoned houses. The figure does not include the estimated 49,000 holiday homes around the State.

Prof Kitchin said the scale of available housing should turn the construction industry away from housing and towards infrastructure, particularly where needed in broadband, energy supply, roads and public transport.

“I would say there is a few years worth of housing supply there,” he said. “Particularly in the rural counties where there is a huge oversupply of housing.”

But he added there were questions about whether the surplus housing was in areas where it was needed when the economy begins growing again.

“The higher rates of vacancy tend to be in the counties that don’t have large towns,” he said. “So there is 30 per cent vacancy in Leitrim, while the midlands-west counties have higher rates of vacancy than, say, Dublin which has the lowest at just under 10 per cent.”

It is believed there are around 200 so-called ‘ghost estates’ – developments built over the past few years that remain unsold - among the overall empty housing stock.

Mr Finneran said he wanted to see some of the empty properties used to home the 56,000 people currently on local authority housing waiting lists.

The Department of the Environment said the figure of between 100,000 and 140,000 empty houses came from a report on the construction industry by DKM consultants for the Government.

PA

gurramok

That should shut the doubters on this forum up about the true figure and that they ain't holiday homes. At least we now have definite stats on the huge number of vacants.

And remember, alot of these vacants still have mortgages/outstanding loans on them hence they are important to the banking system.

I hope Mr. Finneran will not chuck those 56,000 people into the vacants away from amenities but rather fill the vacants up in the cities first.

If there are 600,000 homes in Dublin as said in the article(true?) and 10% vacant, thats 60,000 right there lying empty in a region where people want to live.

fontinalis

Something like this is why I never thought the boom was sustaianable. Did no-one think there would be a saturation point for houses (granted a large number of recently departed immigrants rented houses in the past)?

JoeyJJ

30% of houses in leitrim are vacant, thats mad. There are alot of section 23 tax breaks which lead to estates being built in villages which little industry to keep people employed in Ros and Leitrim. Termonbarry is an example and I don't think that is actually that bad. I don't think Carrick and Longford have enough employment to sustain all the housing within a 20 min commute.

fontinalis

JoeyJJ wrote: »

30% of houses in leitrim are vacant, thats mad. There are alot of section 23 tax breaks which lead to estates being built in villages which little industry to keep people employed in Ros and Leitrim. Termonbarry is an example and I don't think that is actually that bad. I don't think Carrick and Longford have enough employment to sustain all the housing within a 20 min commute.

It was just the mind set of the time, that throwing up apartments was some kind of silver bullet.

Klingon Hamlet

I wish the gov could set up a scheme to house our homeless

The_Conductor

Klingon Hamlet wrote: »

I wish the gov could set up a scheme to house our homeless

What do you have in mind?
Most of these properties are in locations no-one reasonably wants to live in after all.......

stepbar

Klingon Hamlet wrote: »

I wish the gov could set up a scheme to house our homeless

They do.... it's called Rent Allowance and I'd safely say 99% are entitled to it.

Klingon Hamlet

smccarrick wrote: »

What do you have in mind?
Most of these properties are in locations no-one reasonably wants to live in after all.......

If buyers don't want to live in them, then why not give them to those who are tired of living on the streets?

The_Conductor

Klingon Hamlet wrote: »

If buyers don't want to live in them, then why not give them to those who are tired of living on the streets?

People on the streets gravitate to Dublin.
I don't know why- but any of the homeless organisations will tell you that per head of population the homeless issue in Dublin is vastly higher per head of population, than in any other part of the country. They will also annecdotally tell you that those availing of their services in Cork, Galway and elsewhere- sooner or later approach the same organisations in Dublin.
I don't understand the reasoning behind in.

Also- its not as easy as simply handing over a vacant property to a homeless person. Very often those affected by homelessness have serious problems that may include psychological problems, broken relationships or families, which in turn often lead to alcholism and other addictions. Homeless people have rights- however those rights very often are ignored- or in many cases circumvented- for example, by requiring a place of abode in order to claim social welfare entitlements. It really becomes a case of which came first- the chicken or the egg.

Randomly handing out vacant properties to the homeless- while a nice altruistic gesture- would only help a very small portion of the homeless, whose sole problem is that economic circumstances, means they are down on their luck. This sub group of the homeless- are by far in a minority.

Services need to be targetted at the homeless- but you need to recognise that their needs extend far beyond simply putting a roof over their heads.

funnyname

The construction industry suggested the true figure was 40,000.

Well they would, wouldn't they!

douglashyde

Klingon Hamlet wrote: »

If buyers don't want to live in them, then why not give them to those who are tired of living on the streets?

because people living on the streets dont have any money - keep in mind the goverment doesnt own these houses!

brianthebard

douglashyde wrote: »

because people living on the streets dont have any money - keep in mind the goverment doesnt own these houses!

The people who built them will be bankrupt soon if they aren't already. KH's question is just another reason why NAMA is the worst possible option, if the banks were nationalised or a good bank/bad bank system set up, at least the government would have assets that could be put to good use-old folks homes, housing facilities for the homeless, outpatient rehabilitation units, schools, whatever you want.
I agree with smccarrick that you can't just randomly hand out houses but at the same time there are so many free that a group of homeless people could be housed in a single estate, along with having space for carers and other workers to provide assistance.

Out of interest, does this report include houses/estates which are not finished but have been sitting vacant for months/years now? Because I know of a few around Galway and I'm sure there are many more which were never finished.

mathie

Klingon Hamlet wrote: »

If buyers don't want to live in them, then why not give them to those who are tired of living on the streets?

Excellent idea.
In other news everyone with a mortgage walks away from their responsibilities, becomes homeless, gets a free house, ???, profit.

Victor

brianthebard wrote: »

I agree with smccarrick that you can't just randomly hand out houses but at the same time there are so many free that a group of homeless people could be housed in a single estate, along with having space for carers and other workers to provide assistance.

This could be simplistic thinking. The most overwhelming housing problem over the last 50 years has been the ghettoisation of the poor, less educated, less fortunate, this with anti-social problems, etc. into council estates. What you are advocating is a repeat.

Klingon Hamlet

mathie wrote: »

Excellent idea.
In other news everyone with a mortgage walks away from their responsibilities, becomes homeless, gets a free house, ???, profit.

NAMA should include in the reduced purchase deal the acquisition of unused, unsellable property built through loans given by insolvent banks to insolvent builders. Our tax is paying for all of this; let;s see that some good comes out of it. Not just monetary stability; stability in society. Our morals went out the window over the last decade; now's the chance to reclaim our dignity and supporting those in need by taking these empty, unused, unsold homes and donating them to a worthwhile cause as part of the NAMA agreement...

...or maybe I'm a do-gooder? Again, our money is being spent on NAMA. And our money is paying off the very loans taken to build these empty homes.

Victor

Klingon Hamlet wrote: »

unsellable property

Why should we take on properties that nobody wants?

brianthebard

Victor wrote: »

This could be simplistic thinking. The most overwhelming housing problem over the last 50 years has been the ghettoisation of the poor, less educated, less fortunate, this with anti-social problems, etc. into council estates. What you are advocating is a repeat.

Not really. Obviously I haven't laid out a whole manifesto on the issue but its pretty clear that there is an oversupply of houses, many of which are held by the banks who will soon be bailed out. The govt should put them to use in some way, my earlier post was an example of how this could be done. I think the alternatives of doing nothing or allowing further building work in a couple of years while these properties still lie empty will be more damaging than a coherent attempt to convert and improve these vacant properties.

fontanalis

I think frontline is covering this tonight.

MarchDub

Very depressing - and alarming - report on the amount of vacant housing supply in the country. The second link gives the numbers county by county.


http://irelandafternama.wordpress.com/2010/01/18/an-estimate-of-vacant-housing-in-ireland/

http://irelandafternama.files.wordpress.com/2010/01/oversupply-of-housing.jpg

mrgaa1

Old, old news - its in other threads.

westair

MarchDub wrote: »

Very depressing - and alarming - report on the amount of vacant housing supply in the country. The second link gives the numbers county by county.

Thanks I hadn't actually seen this before. This is the worst news yet and does not bode well for any recovery anytime soon. Some of these areas must look like post Famine towns.

Victor

Report: http://www.uep.ie/pdfs/WP%201002%20W.pdf

http://www.irishtimes.com/newspaper/ireland/2010/0305/1224265631515.html

345,000 homes vacant, says report

FRANK McDONALD Environment Editor

THE NUMBER of vacant houses or apartments in the State stands at 345,000, or 17 per cent of all housing, according to new report published today by the Urban Environment Project at University College Dublin.

This is higher than a recent estimate by researchers at the National Institute of Regional and Spatial Analysis, based in NUI Maynooth, which put the figure at 300,000. The Construction Industry Federation maintains only 40,000 homes are vacant.

“Allowing for holiday homes, obsolescence and an expected market vacancy rate, over 170,000 of the housing stock in Ireland can be categorised as an excess vacant supply,” the latest study by researchers at UCD and Dublin Institute of Technology (DIT) says.

Their findings show a striking difference between vacant housing stock in Dublin and the rest of the State. In particular, rural areas are identified as having a major oversupply of housing, reflected in continuing downward price pressure in the new homes market.

Demographic and statistical analysis by Brian Hughes of DIT, developed in the Urban Environment Project’s report, indicate that vacancy levels in the greater Dublin area remain at 11.5 per cent in 2009/10 compared to 17.43 per cent in the rest of the State.

“Any market recovery is most likely to occur first in the Dublin second-hand market where supplies at selected locations are limited,” it says. “This would be followed by the new homes market at locations with good transport access, with other areas trailing behind.

“The identified vacancy levels have major consequences for the future prospects and valuations of development land,” according to Dr Brendan Williams of the UCD school of geography, planning and environmental policy, who was the lead author of the report.

This would have “significant implications” for Nama as well as national and regional planning policies.

“Valuations of development land based on the expected sale of completed developments will need to be revised severely downward,” Dr Williams warned.

SLUSK

It should be easy to do fire sales and let the prices of Irish homes fall to reasonable levels. This is what would have been done in a free market economy but Ireland does not want free markets.

Amhran Nua

Thats about eight to ten years of natural demand. Even if you remove the unlivable ones, lets say a very generous half, we don't need to build another house for five years to satisfy demand, which probably means the property prices will stagnate or continue to drop, more likely the latter, for that period. Since about half that is classified as unsold stock, anytime between 2013 and 2016 the bottom will be reached. Yes, I can see NAMA ending well.

shoegirl

I think technically, we have a problem with residential property being effectively withheld from the market. I have been looking at places I could potentially buy (had I sufficient savings, which I don't, so its a pipedream that is not going to happen for another couple of years) and I cannot believe the number that have been on the market for over a year.

I use the property bee toolbar and the property drop website, and I'm stunned at how small the decreases have been on the places I would be interested in.

Same thing in the local rented market - there are very nice places for rent in that area that are on the market for several months - maybe one or two small price drops - pretty much typical market places. In fact in that area (East Cork) it seems that most places take 2-3 months to let. But there are lots of people looking for accomodation.

Put it this way, an average salary is supposedly 32k and the median wage is allegedly 29k. An earner getting that earns 2000 to 2200 a month net.

So in terms of borrowings, that "average" earner on their own can only borrow a max of around 130k and would need significant savings in most counties.

The average house price nationally is 214k which means this earner would have to save every last cent of their income for 3-4 years in order to make up the difference. But the price of a house in Dublin is still 278k which would leave a huge shortfall.
Even for 2 earners (and as such a slightly higher risk of one income being lost at some point) on about 25% above the average salary, the combined income is about 85k which is still around 4 times the Dublin rate and would still leave the borrowers struggling to save a sufficient deposit and get a mortgage.

Now look at the rented sector. I've a theory that since 33-50% of the sector is dependent on social welfare rent supplements, cash based top-ups are the norm and 78% of the population otherwise owns at least one home, the majority of the self-paying tenants are not home owners because they earn too little, have insufficient savings, or have a poor credit history and are unlikely to be able to afford even the current depressed house prices.

Now an average rent is 800 a month nationwide, which might be understated because of welfare tenants paying cash topups that are not recorded. This means that the self-paying tenant in my examples above would realistically want to keep their rents to either 25% or 33% in order to be able to make ends meet. This would be 450 to 700 a month for the example earners above. That means that most would not be able to afford an "average" rent either, unless they share or rent a cheaper property.

Lets face it, somebody who cannot afford a house isn't going to be able to suddenly slurge on rent so rents will - slowly - follow house prices downwards. The only reason they may be stopped is the baseline effect of rent subsidy. But if RA tenants limits are reduced, if welfare cuts continue, this will bring this down - but the trend towards tying tenants into 12 month leases will make this slow to appear.

I think what might be needed is more hybrid models such as rent-to-buy schemes and maybe long term leasing in order to plug the gaps between realistic housing spending for lower earners. Lots of these people would love to buy, but are simply either priced out of the market to such an extent they will find themselves either trapped in poor quality low end housing or unwilling sharing.

The only reason I'd like to buy a house is because I am terrified out of my wits as to what happens when I hit retirement age on a modest defined contribution + state pension if rents rise like they have over the last 10 years. I simply wouldn't be able to afford it. To be honest thats the main reason I would like to buy. If I realistically knew that I could afford to pay rent on a small pension I'd be happy. But I am not convinced.

beeno67

Just 2 brief points on this report.

1. The "headline figure is 345,000 but the actual figure (excluding derelicts, holiday homes etc) is 170,000

2. The Dublin region is not nearly as bad. 9.7% are deemed "vacant" which based on the above, probably means about 5% are vacant and available for sale/rent. Based on this they say:

"The situation differs in parts of the Greater Dublin Area which could recover more quickly in terms of its demographics, income,
employment and household formation levels particularly at locations with good transport

infrastructure and facilities."
They said on radio today that the overhang in Dublin is about 6 months. Anectdotally most of this oversupply in Dublin is appartments.

Oafley Jones

I was just listening to The Housing Minister Finneran on the news claiming that we've a social opportunity for those who are on waiting lists and can't afford houses with the amount of empties. Thank god there isn't a mechanism keeping prices up. :eek:

It's when you hear proclamations like that that you realize that this government will never change.

gurramok

beeno67 wrote: »

Just 2 brief points on this report.

1. The "headline figure is 345,000 but the actual figure (excluding derelicts, holiday homes etc) is 170,000

2. The Dublin region is not nearly as bad. 9.7% are deemed "vacant" which based on the above, probably means about 5% are vacant and available for sale/rent. Based on this they say:

"The situation differs in parts of the Greater Dublin Area which could recover more quickly in terms of its demographics, income,
employment and household formation levels particularly at locations with good transport

infrastructure and facilities."
They said on radio today that the overhang in Dublin is about 6 months. Anectdotally most of this oversupply in Dublin is appartments.

1 - you forgot 170,000 does not include "an expected market vacancy rate" so its higher.
2 - DCC which is the core area is 12.57%(Apr '09). Thats very high for a high demand core city area. There would be feck all holiday homes in DCC, its common sense.
Outside this area there would be locations where there is less demand like those remote towns in Fingal which may be understandable as to why they remain vacant as less demand to live there.
And yes, alot of the vacants in DCC are apts, as I said on this forum on countless occasions to the doubters, I live across the road from some of the empties in the Docklands area.

Victor

Oafley Jones wrote: »

I was just listening to The Housing Minister Finneran on the news claiming that we've a social opportunity for those who are on waiting lists and can't afford houses with the amount of empties. Thank god there isn't a mechanism keeping prices up. :eek:

It's when you hear proclamations like that that you realize that this government will never change.

So, if we move people off the waiting list into these vacant properties, but what happens the properties they currently live in? Sure there will be a proportion of people where their accommodation is too small, but one is still going to have lots of empty properties.

SLUSK

I would not be surprised if the current Irish government or the next one pays to demolish all these empty houses in order to keep the prices high.