Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
A LEADING HOUSING expert says figures suggest that Ireland has built more properties for rent than for sale for the first time in generations.
They also show that despite the total number of newly built properties more than doubling from 2017-2022, the proportion of properties landing on the market for sale throughout this period has dropped by 43.5%.
The other properties which don’t make it to the market are one-off homes, which are built by the owners or for their family members, apartments built for rent and social housing.
In 2017, 7,312 houses came to the market out of 14,338 built, coming to 51% of the total number of properties built that year in the State; as of last year that figure had dropped to 28.7% of homes going to market out of 29,851 built – making that 8,590 properties in total.
The housing units in the remaining 71.3% are, as referenced above, a combination of apartments built-for-rent, social housing and one-off houses.
Lorcan Sirr’s case is that one-off houses are a small slice of the overall pie, with these homes neither coming to the market or being available for rent.
Social housing accounts for a proportion of the wider picture at around 25% of the annual number of newly built homes in recent years. Since 2017 there has been a significant increase in apartments being built, but these are almost entirely for rent.
Out of the total number of 29,851 homes built last year, as per CSO figures, 8,590 came to market for sale.
There were also 9,166 apartments built for rent (including a number for social housing), overtaking the number of properties for sale.
“So despite overall housing output more than doubling in the five year period, we see that the proportion of houses coming to market has reduced by 43.5%,” said Sirr, a senior lecturer in housing, planning and development at TU Dublin who compiled the statistics.
“You could argue we’re still not building the type of housing that we need, either for potential homeowners or as a state and trying to prevent people falling off a cliff when they retire and they’re renting those houses.”
In this scenario, Sirr warned of a danger that the government may have to subsidise renters as they age and retire, which he called an “incredibly unnecessary waste of taxpayers’ money that is the opposite of conservative financial prudence”.
Sirr based the data off Revenue’s stamp duty transaction figures and the Central Statistics Office figures for the number of new dwellings per annum.
Stamp duty transactions are the taxes paid following a transfer of property, and Sirr has counted stamp duty transactions known as ‘executions’ – meaning that these are “done and dusted” sales where the purchase has been completed and Revenue has been notified.
Other transactions are called ‘filings’ but these are only notices that property is set to be transferred, rather than confirmation that the deal is done.
“This is the most accurate measure we have of activity in the housing market – these are historic transactions that are completed and we know are done,” Sirr said.
The CSO’s data on new housing is counted by using the connections to the electricity grid, although this figure has been disputed because while a property may be connected to the grid, it may not have someone living in it yet.
“Working from that official government data – which the CSO figures are – we then use stamp duty transactions to analyse how many of these properties were bought and sold on the market,” Sirr outlined.
When doing this, he found that last year saw the total number of new dwellings was 29,851 and of these, 28.7% became available for purchase. This amounts to 8,590 properties.
Of the other 72% which did not make it to the market, these are one-off homes, apartments built for rent and social housing. One-off homes do not come to the market on the basis that they are most likely occupied by whoever is building them.
Social housing figure for the previous three years have came in at around 24-25% of the total number of properties built, but the numbers for 2022 are still to be finalised.
Scheme housing, also known as housing estates, contain the type of property of which most arrives on the market for purchase.
When contacted, the Department of Housing said it believed “access to the market for purchasers is strengthening”.
A spokesperson pointed to efforts to improve things for first-time purchasers.
“Last year, according to the CSO, some 16,112 homes were purchased by first-time purchasers – the highest number since 2008,” the spokesperson said.
But the department’s figure doesn’t include the number of homes which were built in previous years.
Indeed, the CSO told The Journal that the “data for 2022 may include houses built in previous years, which were sold in 2022″.
This figure also doesn’t include the number of homes bought by people who weren’t first-time buyers.
The department spokesperson added that Minister for Housing Darragh O’Brien’s measures to protect against the “bulk purchase of houses and duplexes” by investment funds had resulted in “almost 16,000 residential units being ring-fenced for individual buyers” and restricted from bulk buying or multiple sales to a single purchaser.
This measure was introduced after it emerged that a large number of houses in a new estate in Maynooth, Co Kildare were to be purchased by investment funds.
The statement continued: “An adequate supply of housing across all tenures is critical to addressing the challenges in the housing market, including for home ownership, social housing and private rental.
“Increasing homeownership is a priority for Government. A record €4.5 billion in funding will be provided to increase housing supply across all tenures this year, including €1.3 billion to support delivery of affordable housing and €900m to support home ownership and help more than 15,000 households to buy their own home.
“Home completions are at record levels, including some 8,000 new build social homes, likely the highest number delivered in a generation.”
Sirr pointed to CSO data which he said documents a major growth in apartment developments across the country – surging by 420% since 2017, or 2,227 apartments to 9,166.
He said these have been geared towards the build-to-rent sector so, despite the increase, few apartments are coming to the market for sale.
“The vast majority of apartments are for build-to-rent and social housing so they will never come to the market for sale,” he told The Journal.
“They are so expensive to build that only funds with deep pockets, or Approved Housing Bodies, funded by bank loans or government funding, can develop them, but then only for rent.”
“The point of the research is to see the amount of new housing stock coming to the market every year and the location of this stock. From this we can see the decline is in Dublin and the uplift is in the commuter counties,” he said.
“Apartment output in Dublin city is up 419% since 2017 but at the same time new housing estates are down 73%.
“If you squeeze the home ownership balloon in one area – Dublin – it will reinflate in another area, in this case the commuter counties.
“First-time-buyer activity in the new homes market in Kildare is up 273%, and in the Mid-East including Louth it’s up 212.5% since 2017.”
The lecturer outlined the projections on the Tortoise Shack Podcast recently, saying that it was possibly “the first time in the history of the State that we’ve seen such a reduction in new housing that comes on the market for sale”.
“And that’s going to have a huge effect on home ownership as first-time buyers quite often buy new homes,” he told the podcast.
Speaking to this website, the lecturer said that census data begins in the 1950s and he found the situation – where more homes were available for rent than to buy – had not been replicated prior to 2022. Figures prior to 1956 are held in the National Archives.
His figures, which examine the ‘net housing coming to market’, based off the aforementioned CSO and Revenue figures, show that this has dropped significantly since 2017. Then, the proportion of the total number of new properties coming onto the market stood at 51% of the total housing output in the State – coming to 6,840 homes.
The other 49% is made up of people building their own homes, as well as houses and apartments built for rent and social housing.
But the percentage for new properties going on the market for sale has mostly trended downward since 2017.
It fell to 34.5% in 2020, despite the number of new homes increasing to 7,023. The percentage of new properties landing on the market for sale actually increased slightly in 2021 to 37% – before dropping to 28.7% for last year, as referenced above.
Based on CSO figures from 2019-21, approximately a quarter of new homes are used every year by local authorities to ease their own waiting lists, however the final figure for 2022 is still being gathered by State agencies.
Figures from the CSO show that the rest of last year’s housing output is made up of 15,170 scheme houses, 9,166 apartments and 5,522 one-off houses were built in 2022.
“In the last 20 years, the housing market has gone from two in three of new builds going to market to, in 2022, at best one in four,” he added.
The “most dramatic decline” has happened since 2017, according to Sirr, which he said coincides with the growth in build-to-rent apartments.
In the CSO’s figures for last year, it found that the “largest relative increase” was in apartments which saw growth of 78.7% from 5,130 in 2021, out of a total housing output of 20,433, while in 2022 there were 9,166 apartments out of 29,851.
A previous heading on this article read that the proportion of houses which came to the market had ‘reduced by 41% in 5 years’. This has been amended to the correct figure of 43.5%.
If only they had been warned and invested money and encouraged others to invest. They instead punished landlords encouraging them to leave the market. It’s like following populist views is a bad idea
@Craic_a_tower: how exactly were landlords punished?
@Joanne McBride: landlords that kept their rent low were punished by the introduction of the RPZ. Addition fees and charges were added. When the rents fell the government told tenants to break leases. Renting a property is not seen as a business for tax purposes.
The solution to the housing crisis isn’t as difficult as the hand wringing politicians make out. Building social housing would free up privately owned rental properties, reducing rents due to an increased supply and also reducing house prices across the entire housing market.
This is why the politicians constantly resist building social housing, because houses have become viewed as assets instead of as homes and they fear home owners won’t vote for fir them if they do anything to devalue houses, but what all the home owners that are delighted with ever increasing capital growth forget, is that their children will need to rent and or buy homes too and at the moment most of them can’t afford to do either, even with a good job.
@David Van-Standen: to me it seems people don’t want the government to pay for it but want magic investment without any profit.
@David Van-Standen: Social housing estates of the past have been total failures.
High unemployment and high crime were prevalent in these estates.
The councils sold them off to be rid of the problem.
Now people are asking to build more of these.
@Roger Bond: they are still to this day are the worst neighbourhoods in the country.
@David Van-Standen: The problem with social housing is that Irish people do not like it because of the stigma attached. Other potential renters have unrealistic expectations and will reject perfectly good housing for frivolous reasons.
We have several problems with housing:
If we encourage new housing construction, e.g., tax breaks for developers, or streamlining the process – it’s instantly taken advantage of driving up the prices.
When we give tax breaks or incentives to develop/buy houses they need to be also frozen to stop the rise in house prices.
For instance, how many times have first-time buyers been incentivised only to have the price of the house increased by 10%.
————
There are a lot of barriers to owning a home. Some of which could be stripped away.
Financing options could be simplified in lower interest loans, again with first time buyer programs the housing prices need to be capped/frozen.
Selling properties to tenants is a good idea – and maybe if you are buying from your landlord you buy at the price from when you first started renting. i.e., if you rented for 10 years you buy the property at the price register price from 10 years ago – not todays inflated market price. Similarly, if you rented for 5 years or 2 years, same applies.
—————
The downside to increased house prices for current home owners is that it makes it less attractive to sell – as these sellers need to buy somewhere else, and the house they buy would also be increased in price – there’s very little incentive to sell your home if you have to buy an even more expensive one. For example, there are several 2/3 bed new homes on the market near me that are smaller square footage than my current home, but the market price is far higher. I don’t have an incentive to sell my larger home only to be able to afford a smaller home.
——
A huge problem in this country is the lack of availability of land to actually build new houses. House prices are massive in condensed populations. And buying a home outside these areas is not feasible due to the lack of infrastructure, public transport, amenties. We need to build commuter towns with trains, and buses, need to improve infrastructure – roads – amenities and create a better option than cramming everyone into a single space.
——
It needs to be a multifaceted approach that addresses the various factors contributing to the reduction in the number of homes coming to the market is likely to be most effective in combatting this issue.
@Rafa Condron: why should a landlord give a tenant a discount on purchasing a house after the service they paid for was provided? The tenant didn’t buy and replace the white goods nor pay for the maintenance of the property. It is very easy for you to decide to take or spend other peoples money.
@Craic_a_tower: That’s a good point – and I understood that when I wrote it. It has a lot of merit, the service was the rent and not the maintenance.
But it ignores the things like that tenants have been paying rent for the use of the property, which contributes to the landlord’s income and potentially the equity value of the property.
Offering a discount to a tenant who is interested in purchasing the property they have been renting could be beneficial to both parties. The landlord could potentially save on marketing and selling costs, and the tenant could avoid the costs associated with buying a new home, such as moving expenses and real estate agent fees.
And there could be also added tax incentives for both sides.
It’s just an idea. If you don’t want to do it, we won’t.
@Rafa Condron: no you don’t want a discount alone you want it so it was like the tenant bought the place when they started to rent. Effectively you want to steal the equity off the person that took all the risk and made all the payments. The first decade of renting it is normal for the landlord to be paying out more than they take in due to costs and taxes. So you are saying the landlord should just give the tenant this value away. The tenant got the service they paid for which includes white goods and maintenance and never builds any equity in the property. It is this type of thinking that drives landlords out of the market. Why would any landlord choose to invest in the market if this was the outcome? As I said it is easy for you to spend other peoples money.
@Craic_a_tower: Thanks for pointing that out. It would be purely optional and some restrictions would have to be put in place on both sides. But it’s not a completely insane idea – and if it suited some to do it – then why not – as long as everyone is happy. Reading back it comes across as if I meant as standard – I didn’t mean it this way and purely optional for a landlord to sell cheaper in order to avail of some tax relief, save on marketing, estate agents, and lost time waiting for sale to go through.
Of course you have valid points, and in no way did I expect that my paragraph and a bit about was the be-all and end-all of how it might work. Just an idea to get landlords to sell to tenants to make it lucrative for both sides.
One possible problem is buying the property for 250k and it’s worth 350k today – means the former tenant could sell and pocket 100k.
In this regard there would need to be restrictions on when they can sell and perhaps a percentage of the sale being forwarded to the former owner.
I really am just spitballing. But it’s not entirely crazy.
@Rafa Condron: no it is completely insane! You are effectively saying a long term investment plan is completely invalid and the investor should give it away to a customer just because you like the sound of it. The removal of CGT to incentive the landlord to sell to the tenant is interesting but is never ever going to be sell for what you bought it for or even close. You are completely ignoring all other costs of renting outside the purchase price. Why would any investor do this? Are you willing to go do a job at a loss to you? That is what you are saying. If the government want to do that because ultimately it saves them money that is fine but investors are not charities nor social services. You also miss that landlords can’t avail of social services because but pay more taxes
This is a what happens when the government stops building social housing and instead replaces it with HAP. It drives up the prices for everyone by increasing the number of people chasing the same supply and what does the tax payers have to show for all this money spent at the end of day? Nothing, but an ever increasing bill. I wonder what the stats are on HAP and how much of it is now being funneled out of the country to foreign investment funds? It would be an interesting stat to see
@Coke Santy: the government got people housed for the money they spent on HAP. By your reasoning there is no benefit to stopping people being homeless. That should mean you have no issue with the government not paying to house people and letting people be homeless. After all they get nothing for HAP
@Craic_a_tower: Reread the the first line I wrote. I never once insinuated we let people go homeless, I’m pointing out how flawed the HAP system is. It’s an ever increasing bloated mess that essentially aquades to welfare for landlords that leads to ever higher Rent/house prices. Can you imagine the amount of cheap cookie cutter estates the government could have built for even a fraction of the money spent on HAP over the years? Houses that would remain in state ownership and be a tangible asset for decades to come. Now we are just shoveling ever increasing amounts into overseas pension funds and we still have a housing problem…
@Coke Santy: can you imagine all the people who would have been homeless if HAP was not being paid? You aren’t joining up basic consequences. Reality doesn’t change because it would make more sense to build social housing when they just didn’t have it. They had to use HAP to house people. They couldn’t let them be homeless because it would be better to build at some point in the future. You also seem to miss people often were renting privately and circumstance changed so go onto HAP.
@Craic_a_tower: It was a critique of the government housing strategy for the years up to, and including, the housing crisis. If the government had taken the ‘cookie cutter estates’ position a decade ago when signs were pointing to prices starting to shoot up, we wouldn’t be in this mess. The poorest would be housed, less people competing for the same properties in private sector.. lower prices and less homelessness. Instead they doubled down on HAP and we see how that’s been playing out. If you’re talking about what moves could be made to fix the problem now… Yeah, you couldn’t just turn off HAP overnight because the government hasn’t been building social housing for the last decade like France, Spain and Germany have. They still have housing issues, but ours is on another scale entirely
@Coke Santy: but they didn’t and your claim was they got NOTHING for HAP. I am pointing out you are wrong and your “solution” involves a time machine. If you actually paid attention the government were warned about housing and the public didn’t want investment into development.
@Craic_a_tower: I made it quite clear in my above post it was a ‘what if’ situation and if the government had taken a different approach a decade ago we would be in a much better situation today. Your reply is to say you need a ‘time machine’ for that…. You seem to be arguing a point that was never made. I never said if the government does ‘x’, ‘y’ and ‘z’ today the 12th of March 2023, the housing situation will be solved by teatime tomorrow.
@Coke Santy: I made it very clear to say HAP gave them nothing is just not true.
Governments in Ireland have been messing around with rental property since they did away with bed sits and this is the result. There is so much cash on deposit earning no interest that could be used to build houses if we had a progressive government.
The Irish media use housing for cheap clickbait content nothing has been done over the last 10 years
This is not surprising seeing that minimum standards were reduced for built-to-rent apartments compared to built-to-sell apartments.
If bridging finance was made available it would help existing homeowners to rightsize, making much better use of existing housing.
The government definitely needs to build more Ballymun type social housing. He is is ignorant of the past is doomed to repeat it.
Would be interesting to know what % of housing was refused by An Borda Pleanala during the same period.
have your say