Housing completions may be nearly half official figure, says expert

Statistics based on ESB meter connections ‘wholly unreliable’, says architect

Official estimates for dwelling completions are based on ESB meter connection data, which typically overcount the level of new builds. Photograph: Cyril Byrne

Official estimates for dwelling completions are based on ESB meter connection data, which typically overcount the level of new builds. Photograph: Cyril Byrne

 

Official estimates for the number of new homes being built each year in Ireland are entirely unreliable and may be overestimating the level of supply by nearly 50 per cent, a leading housing expert has warned.

Dublin architect Mel Reynolds claims the 15,000 figure for house completions last year, being used by the Department of Housing, bears no relationship to the number of new homes coming on the market.

This is because official estimates are based on ESB meter connection data, which typically overcount the level of new builds, reflecting the fact that new electricity connections can be triggered by work to existing buildings or by formerly vacant units coming back on stream.

“It’s a wholly unreliable way to calculate house completion levels,” Mr Reynolds said.

Nama developments

He also claimed the numbers were being inflated by recently completed but unoccupied National Asset Management Agency developments and by the finishing out of so-called ghost estates, which do not strictly qualify as new homes.

Mr Reynolds said the actual level of house completions for 2016, based on stamp duty transactions and an estimate of self-builds, build-to-lets and local-authority construction, was probably closer to 8,000. This is almost 47 per cent lower than the department’s official estimate. The department declined to comment.

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An alternative way of measuring the number of new homes under construction is by examining commencement notices lodged with local authorities.

But Mr Reynolds said this data was also skewed by the fact that large multi-unit schemes often lodge commencement notices for a phased development that may take several years to complete.

He also highlighted that while new builds were previously registered with the Building Control Management System, a recently introduced opt-out for once-off dwellings means the database is no longer an accurate measure of construction.

First-time buyers

Mr Reynolds said the Government’s policy focus was almost entirely on first-time buyers and new builds, which form a comparatively small segment of the market when juxtaposed with the 198,000 homes lying vacant in the State.

Dublin Institute of Technology academic Lorcan Sirr said that while the official figures suggest there were 50,951 housing completions between 2011 and 2016, the actual number of new households recorded by the 2016 census was just 18,981.

The anomaly is explained by the fact that as new homes come on stream, older ones are becoming derelict or being taken over for reconstruction.

Dr Sirr said the focus should be on the increase to the existing housing stock rather than the number of new builds.

He also noted the causes of demand in the Irish market were more complex than previously thought, with changing family structures at the core.

The latter was linked to more people staying single longer and to more people getting divorced, which necessitated a bigger housing stock, he said.