The Republic’s housing crisis may be worse than is believed because the Government is overestimating the number of new homes being built, a new report claims.
A five-year slump in construction left the State facing a squeeze in the supply of new houses that drove sharp increases in property prices during 2014.
According to a report published by DKM Economic Consultants and the Society of Chartered Surveyors Ireland (SCSI), the supply problems could be more serious than previously thought as the actual level of housebuilding is below the number indicated by official figures.
SCSI incoming president Andrew Nugent said Government figures show that 11,016 new homes were built in 2014. However, his organisation believes the actual number was around 8,900, and that it will be around 10,000 in 2015 and 14,000 in 2016.
“This is significantly lower than other published projections, and indicates that the new housing supply issue is even more serious than previously thought,” Mr Nugent said.
The Economic and Social Research Institute (ESRI) estimates that the Republic needs to build between 19,000 and 33,000 new houses a year. Other figures suggest that the State needs a minimum of 80,000 extra homes between 2014 and 2018. The surveyors believe that passing the new Planning and Development Bill, which will cut builders’ social housing and development contributions, will help get more projects off the ground.
However, Mr Nugent warned that a lack of development finance, working capital and credit lines for builders was holding up residential construction in areas where it was needed. “This is a key issue for builders right across the country.”
The Department of the Environment’s estimate for new homes built here last year is based on the number of homes that connected for electricity
However, the SCSI believes that 20 per cent of the properties connected for electricity in 2014 had been built in previous years and had either been in receivership or owned by Nama. Its estimates are based on the number of new housing starts and surveys of its members.