Lorcan Sirr: Central Bank should revise housing figures

Government has overstated number of new homes built by nearly 60 per cent, CSO says

“Do we have the capacity to churn out 25,000 houses every year,” asks Lorcan Sirr.

“Do we have the capacity to churn out 25,000 houses every year,” asks Lorcan Sirr.

 

A lecturer in urban economics, housing and rental markets is calling on the Central Bank to revise economic forecasts based on the housing market.

Lorcan Sirr maintains that many forecasts were based on the number of houses built in recent years, but these figures had now been revealed to be inaccurate.

He pointed out that the latest figures from the Central Statistics Office reveal that the Government has overstated the number of new homes built in the State for several years by nearly 60 per cent.

But new technology and modern building methods mean there isn’t a need to worry about reduced numbers of workers in the construction industry, maintains the Minister for Housing Eoghan Murphy.

The CSO’s “new dwelling completions” index, published for the first time on Thursday, said 53,578 homes were completed between 2011 and the end of 2017.

That compares with previous Government estimates – based on electricity connections – of 84,500.

Mr Sirr told RTÉ’s Morning Ireland that he and a number of other academics and architects had been pointing out for some time that using ESB connections was a faulty methodology.

Best methodology

“We raised the issue of this flaw several times with Simon Coveney, but he maintained it was the best methodology. To be fair to Eoghan Murphy he asked for new methodology.”

He said it was important to know what the exact capacity was. “Do we have the capacity to churn out 25,000 houses every year? Do we have the tradesmen or women?

“I think we could stretch to 17,000, after that quality will suffer,” he warned.

Mr Sirr pointed out that between 2011 and 2017 only 53,000 houses were built while the Government had claimed that 85,000 were built. “We’re way behind where we should be.”

He also raised the issue of obsolescence – where houses fall out of use. This is part of the natural process, he said and was 0.4 per cent which translates into 8,000 houses per year, which when subtracted from the 14,000 new houses built last year meant net additional stock of just 6,000.

“If you’re not adding to the housing stock, you’re not dealing with the problem,”

The lecturer called for better use of State land claiming there is more than enough land to provide housing especially if joint ventures are undertaken.

He also said the Government should try “Dunkirk solutions” (where lots of small boats were used to transport soldiers) by using small builders who are being ignored in policy initiatives. He maintained that all the support to date are geared towards large builders, while small builders are actually “doing half the heavy lifting.”

Local authorities

Mr Sirr defended local authorities who declined Nama properties pointing out that local authorities have their own criteria, they know the type of housing they need, where they need them and how much they would need to spend to refurbish them.

Quite often the properties being offered to them were “the wrong type, in the wrong place and of poor quality”.

He also questioned the wisdom of the current system of self certification saying that sometimes the person signing off on the certification could actually be in the employ of the developer.