Madam, – It is claimed by the Construction Industry Federation (CIF) that there is less than one year’s supply of new houses in the Republic based on medium-term demand (Finance, February 2nd). The CIF refers to the recent Department of the Environment National Survey of Ongoing Housing Developments, which inspected 2,846 developments.
While the CIF is correct that there are fewer than 25,000 completed new homes in the State, it omits to mention there is also a substantial number of incomplete houses and apartments. According to the department’s survey, 9,976 dwellings are nearly complete while a further 9,854 dwellings are at various early stages of construction in these developments. This means there is a total of 43,000 complete, near-complete and incomplete dwellings in unfinished estates throughout the country.
Some 78,000 families are living in these estates and facing issues relating to health and safety, security, anti-social behaviour and negative equity, among others.
I think it is also important to highlight the difference that exists between overhang (which refers to the number of unsold new houses/ apartments) and oversupply (which refers to the number of houses / apartments in excess of household demand taking into account holiday homes and the expected rate of vacancy).
Even the Department of the Environment, Heritage and Local Government acknowledges oversupply to be in the region of 136,000 units which it contends to be around four years of current housing demand.
The Department of Environment/DKM Consultants Construction Industry Outlook 2009-2011, stated, “Supply overhang in residential market will discourage new building activity for next four years”.
This may alarm the CIF, but it is essential that a clear and accurate picture of the housing market is presented. While it may be in the interest of the CIF and other interested parties to focus on overhang instead of oversupply, this is not in the interest of the general public and those contemplating purchase.
Naturally there are geographical variations, but ultimately the housing market is not going to recover until supply and demand align once more, confidence is restored and overall economic recovery is achieved.
The more pressing issue concerning the housing market is the plethora of unfinished housing developments throughout the country. They are having an economic, environmental and social impact on families throughout the State and very little has been done to deal with this problem.
While acknowledging that an advisory group was established to deal with the issue by Minister of State for Housing Michael Finneran and Minister for Planning Ciarán Cuffe in October 2010, now is the time for action and not just words. – Yours, etc,