Why even the Government can’t count number of new houses

Department says it collates several datasets to estimate residential building rates

After a long period of very low levels of supply of new housing, there are very positive signs of increased supply.

After a long period of very low levels of supply of new housing, there are very positive signs of increased supply.

 

The Department of Housing has again defended its use of various housing statistics to estimate home building rates in the economy.

In a response to articles in The Irish Times, highlighting concerns about the use of house completion numbers and their potential to overstate building rates, the department said it collated several datasets in respect of three different points in the house construction process. These include planning applications; commencement notices; registrations with the home guarantee scheme Homebond; and house completions, based on residential connections to the ESB.

In 2016, the department noted that there were a total of 14,932 ESB connections, representing an increase of 18 per cent on 2015. The department said about 42 per cent of these connections relate to once-off units and did not tend to show up on the Central Statistics Office’s Residential Property Price Index as there are no transactions attracting stamp duty.

Critics, however, claim connection data typically overstates the level of home building as it can include reconnections to temporarily vacant dwellings and connections to previously constructed Nama developments or ghost estates.

The department said the connections data provided it with just one of a number of insights into the various stages in housing supply “and is being continually improved”.

“Moreover, all of the indicators point to the fact that after a long period of very low levels of supply, there are very positive signs of increased supply, not just from new-build but from bringing vacant housing back into beneficial use as well,” it added.

Dublin architect Mel Reynolds suggested the actual level of new builds was probably closer to 8,000, barely one-third of the Government’s 25,000 target. He bases his calculation on stamp duty transactions (3,148 for the first 11 months of 2016); once-off house commencements (3,272 for the first 10 months of 2016); and the number of local authority builds (117).

The figure is nearly 50 per cent lower than the department’s housing completion number.

Mr Reynolds said the recently established Building Control Management System (BCMS) could potentially be used to provide an accurate measure of house completions.