Nobody home in 100,000 houses

The_Conductor · 04-01-2009 1:15pm #1

From Yesterday's Irish Indo

Saturday January 03 2009
THE PROCESS of counting the number of empty houses in this small country appears to be a complex one.

Today we report on the results of an investigation which tells us that at least 100,000 newly built houses are lying empty around the country. This is in stark contrast to estimates by the Construction Industry Federation and various estate agents that there are no more than 35,000 'ghost' houses out there.

Apart from the true number of houses waiting to be sold, other questions arise about how many of them comply with the Government's strict new energy guidelines which come into effect next July.

It is important that we get to the bottom of this: many jobs could be at stake.

A CIF survey has forecast widespread job losses next year unless something is done to increase the number of public sector infrastructure projects.

The federation wants the Government to reinstate cancelled public road and public transportation projects, bring forward school and social housing building programmes and scrap the national pay deal.

Meanwhile, the year-long study by business consultant Tony O'Brien, with which the CIF vehemently disagrees, suggests that some 30,000 of 100,000 empty houses are likely to be sold in the normal way, with developers offering the remainder at knock-down prices.

Coincidentally, we read today that the number of families seeking social housing has soared in recent times to 80,000.

70,000 unwanted houses? 80,000 families seeking a roof over their heads?

No, that would be far too simple.

04-01-2009 1:51pm

Where are the details on their investigation?

The indo is getting very sloppy these days.

You would expect to see some detail in a report like that

Wouldnt mind seeing some breakdowns by area, type etc.

The_Conductor · 04-01-2009 1:56pm

321654 wrote: »

Where are the details on their investigation?

The indo is getting very sloppy these days.

You would expect to see some detail in a report like that

Wouldnt mind seeing some breakdowns by area, type etc.

Its an external consultants report by Grant Thornton on behalf of the Department of the Environment (on the strength of which the DoE are suggesting a 46% reduction in property prices in 2009).

The_Conductor · 04-01-2009 1:57pm

Another article elucidating on the leaked report here

By Fiach Kelly

Saturday January 03 2009

BUILDERS could be forced to dramatically slash the prices of more than 70,000 new houses that are now lying empty across the country, a leading construction advisor has warned.

In a damning new analysis -- obtained by the Irish Independent -- it is claimed that developers will have to offload the massive volume of vacant homes in a 'firesale' before the Government's new energy guidelines come into effect on July 1.

The new study found the number of new homes lying empty in 'ghost' estates is far larger than was previously estimated. The findings reveal there are at least 100,000 'surplus' homes -- far higher than the 30,000 estimated by construction industry chiefs and estate agents.

According to the analysis, carried out by Tony O'Brien, head of business consulting for accountancy firm Grant Thornton, market conditions suggest some 30,000 of these will be sold in the current economic climate. But developers may face a race against time to sell the 70,000 remaining properties before the new environmental guidelines come fully into effect.

The Government's guidelines on energy efficiency, which were announced at the end of 2007, require new houses to be 40pc more energy efficient.

Mr O'Brien said that industry estimates of 30,000 to 35,000 vastly underestimated the number of new houses on the market -- and said his figure of 100,000 houses was also likely to be conservative.

He based his study, which took a year to complete, on the 2006 census and housing completion figures from the Department of the Environment.

Privately, leading real estate agencies the total number of empty houses is closer to 80,000.

However, the Construction Industry Federation (CIF) said it "absolutely, totally, totally" rejected the 100,000 figure.

A spokesperson said he was surprised Mr O'Brien had not consulted them about his study, since CIF members built 95pc of all homes across the country.

The spokesperson insisted the 35,000 figure continuously cited by the CIF and Homebond was correct.

Mr O'Brien said he expected that the CIF would disagree with him and claimed that builders cannot afford to keep the huge number of surplus new houses on their books.

Efficiency

"The key question is, will consumers wait to buy houses that comply with the new building regulations, which will offer 40 pc more energy efficiency which should be available soon, or will they be happy to buy an 'existing' new house that will be less energy efficient and is likely to have a lower resale value," he said.

He claims that builders will either "firesale" off their stock in the next six months or they may opt to "retro-fit" the existing stock to bring them close to the new building regulations.

The cost of additional work is estimated to be around €10,000.

The CIF also said 85pc of new homes surveyed by Sustainable Energy Ireland achieved a "B" but Mr O'Brien said the rating did not mean the houses used mandatory renewable energy requirement as required by the Government guidelines.

- Fiach Kelly

04-01-2009 2:03pm

smccarrick wrote: »

Its an external consultants report by Grant Thornton on behalf of the Department of the Environment (on the strength of which the DoE are suggesting a 46% reduction in property prices in 2009).

Do you have a link to the report.
Any stats analysis on it?

04-01-2009 2:05pm

321654 wrote: »

Where are the details on their investigation?

The indo is getting very sloppy these days.

You would expect to see some detail in a report like that

Wouldnt mind seeing some breakdowns by area, type etc.

http://www.finfacts.ie/irishfinancenews/article_1015142.shtml

The CSO also said in the analysis of Census 2006,that there were 266,000 vacant dwellings in 2006 representing 15% of the total housing stock.

Of these, 175,000 were houses, 42,000 were flats and 50,000 were classified as holiday homes. County Leitrim had the highest percentage of vacant dwellings (29.3%) while 11.7% of dwellings in Dublin City were vacant at the time of the census.

There were 140,000 vacant housing units according to Census 2002.

Goodbody Stockbrokers said last month that since April 2006, there have been some 148,000 housing units completed in Ireland, but only 86,500 mortgages were paid out for the purposes of purchasing a new home.

While some of these homes would have been bought without the use of a mortgage, it is clear that there has been a significant increase in the inventory of new homes over the past two years.

The Property Pin says that there are 350,000 vacant houses today - - 17.6% of the overall housing stock.

1. 35,000 unsold new homes as claimed by the Construction Industry Federation.
2. 60,000 holiday homes.
3. 255,000 accumulated housing units from past output.

The rental sector comprises 300,000 units:

Private Rented Furnished and Unfurnished 145,000 Homes,
Local Authority Rented 105,000 Homes,
Voluntary Body Rented 50,000 Homes.

Ireland has in effect more empty housing units than rented homes of all kinds.

The_Conductor · 04-01-2009 2:07pm

321654 wrote: »

Do you have a link to the report.
Any stats analysis on it?

The report has not been published. There is no link to it. A hardcopy of the report was leaked to the Irish Indo and the Examiner. Its not publicly available. Reports by outside consultants generally are not published at all.

04-01-2009 2:20pm

Deleted User wrote: »

http://www.finfacts.ie/irishfinancenews/article_1015142.shtml

Im sorry but when a report quotes an amateur website like the propertypin its just laziness and cannot be taken seriously.

We need hard facts with proper analysis done on them if im going to buy a house

By the way, a friend of mine is now building on a site donated by his father using direct labour from the North. All of the Northern companies who quoted him beat the best southern quote by over 30%. How is that for a turnaround.

The_Conductor · 04-01-2009 2:26pm

321654 wrote: »

Im sorry but when a report quotes an amateur website like the propertypin its just laziness and cannot be taken seriously.

We need hard facts with proper analysis done on them if im going to buy a house

The propertypin is held in very high regard- and in the absence of the publication of reliable sales data by the IAVI- as good as it gets. Its not laziness by any means to quote the Propertypin.

If you want hard data- take a leaf out of my book (and a few others here) and lobby the government to publish sales data in a manner similar to the UK. The situation here is that vested interests do not want the public to have access to hard data- and the government does not appear to have the best interests of the public at heart.

04-01-2009 2:54pm

smccarrick wrote: »

The propertypin is held in very high regard- and in the absence of the publication of reliable sales data by the IAVI- as good as it gets. Its not laziness by any means to quote the Propertypin.

If you want hard data- take a leaf out of my book (and a few others here) and lobby the government to publish sales data in a manner similar to the UK. The situation here is that vested interests do not want the public to have access to hard data- and the government does not appear to have the best interests of the public at heart.

It may be good enough for some people but it is still an amateur site and as such quoting it is amateur too. Some people will accept any results no matter what the source.

The_Conductor · 04-01-2009 3:01pm

321654 wrote: »

Some people will accept any results no matter what the source.

Could you elaborate on what you mean?

What would you consider to be a trustworthy source (as its already a taken that the Permanent/ESRI reports are essentially worthless)? The Propertypin and DAFT reports are considered to be accurate sectoral barometers - there is no better source out there. The IAVI- who do actually have the sale results, are refusing to release their data, as they feel it would undermine the market even further. You could argue that the Propertypin, or DAFT reports are based on anecdotal evidence, rather than hard fact. They are accepted by the industry and media as largely representative of whats happening on the ground.

04-01-2009 4:33pm

321654 wrote: »

We need hard facts with proper analysis done on them if im going to buy a house

Koyasan · 04-01-2009 4:50pm

321654 wrote: »

It may be good enough for some people but it is still an amateur site and as such quoting it is amateur too.

Whether or not they are paid for their research has no bearing on the quality of the research. Read the posts, examine how the information is gathered, rigorously assessed and discussed, and you will see why it is used as a source. It is not a shouting shop a la politics.ie.

SkepticOne · 04-01-2009 6:15pm

321654 wrote: »

It may be good enough for some people but it is still an amateur site and as such quoting it is amateur too. Some people will accept any results no matter what the source.

It's the "professionals" I would be a lot more wary of. Look at where listening to them has us.

04-01-2009 6:20pm

SkepticOne wrote: »

It's the "professionals" I would be a lot more wary of. Look at where listening to them has us.

The problem was/is so many people were introduced on radio or tv as "property experts" or even as "economists" when in fact they were neither.
Liz O Kane
Brendan O Connor etc etc

Then you have the actual economists who were interviewed over the past few years. Most worked for the Government, Banks and Estate Agents
hmmmn no conflict of interest there! :mad:

Do not forget we were being advised to "hop on the boat before she sails" not that long ago. Go look at the dates on some of the thread from the property pin links. The information and raw data was out there from many sources, it was ignored.
Daft, sherry fitz, all the banks and the central bank, the esri, and the CSO all released reports. Many were given a good spin but when you look past the front page you were able to see some scary graphs.

Remember this:

look at the years - they have know all along prices were unsustainable yet allowed the construction industry become so large that:
1 in 8 people (12.6%) are employed in Ireland, in work in construction. This compares with an EU average of less than 8%.
http://www.finfacts.ie/celtictigereconomyireland.htm

johnnyskeleton · 04-01-2009 6:35pm

smccarrick wrote: »

Its an external consultants report by Grant Thornton on behalf of the Department of the Environment (on the strength of which the DoE are suggesting a 46% reduction in property prices in 2009).

They should have hired 2pac from thepropertypin instead. Probably would have cost more though.

the_syco · 04-01-2009 7:21pm

smccarrick wrote: »

Coincidentally, we read today that the number of families seeking social housing has soared in recent times to 80,000.

70,000 unwanted houses? 80,000 families seeking a roof over their heads?

"Social Housing" would be houses that the government helps the people to buy, yes? Wonder where they'll get the money to do so?

Look at it a different way, and you see the government digging the developers out of another hole.

The_Conductor · 04-01-2009 9:00pm

the_syco wrote: »

"Social Housing" would be houses that the government helps the people to buy, yes? Wonder where they'll get the money to do so?

Look at it a different way, and you see the government digging the developers out of another hole.

Nope- under the rules the government set itself- all new social housing units have to meet certain standards under energy efficiency rules (40% higher efficiency than previously). Unless the builders and developers go to a hell of a lot of trouble retrofitting additional insulation etc- no-one is going to be interested. The government simply doesn't have money for the AH scheme at the moment in any case........

BobbyD10 · 04-01-2009 9:46pm

smccarrick wrote: »

Could you elaborate on what you mean?

What would you consider to be a trustworthy source (as its already a taken that the Permanent/ESRI reports are essentially worthless)? The Propertypin and DAFT reports are considered to be accurate sectoral barometers - there is no better source out there. The IAVI- who do actually have the sale results, are refusing to release their data, as they feel it would undermine the market even further. You could argue that the Propertypin, or DAFT reports are based on anecdotal evidence, rather than hard fact. They are accepted by the industry and media as largely representative of whats happening on the ground.

An article from today's Indo:

http://www.independent.ie/business/irish/a-50pc-descent-from-peak-to-trough-1591597.html

Quote from article:

This is a huge difference and some sort of transparency about actual sales prices would obviously be in the interests of the market. The Irish Auctioneers and Valuers Institute does have all the data and this could be used. However, it appears reluctant to release the real data and a report it commissioned earlier this year has not been published.

radioactiveman · 05-01-2009 1:42am

You have to wonder about the quality of government over the past 10 years when nothing was done whatsoever to prepare for this situation (it would seem to me anyway I'm no expert:D).
Didn't the government actually extend tax-free schemes several times to encourage building? If there is regulation at any level, at all, you shouldn't end up with 100,000 surplus units.
Also the fact that 1/8th of people were employed in construction in the last few years says it all really - here we are in hard times again and we are still dependent on foreign multinationals like Dell. After all those years of growth we haven't really created any new industry of our own at all. What exactly were our government doing during this time? Simple question really but still...

Senna · 05-01-2009 4:09am

To answer your question you only need look at the 2008 budget, the gov (FF) let us all know were their loyalties lay and thats in the pockets of the CIF, its been that way of countless years and even though they were facing the toughest budget in 20 odd years, the CIF lobbied them for infinitives to get the empty sold and the gov obliged with every single one.
The gov knew the economy was going down the toilet and could not afford €15m for health screening of young girls, but still gave an open ended budget for FTB's to buy new houses (no secondhand) homebond approved only (so really only big builders benefited) and set a ceiling level of €300k, funnily enough:rolleyes:, €300k is roughly were the average market price is at, so it was just a blatant attempt to stop house prices dropping and keep people buying overpriced houses.
This just emphasises the sad reality of who is running the country, thankfully Tom Parlon (wánker) and kin wont get their wish, a property bust cant be controlled. Houses are too expensive and there are too many of them.

Nobody home in 100,000 houses

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