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%.
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