Cen­sus fig­ures prove lack of sup­ply is our big is­sue

Sunday Independent (Ireland) - Property - - SUNDAY PROPERTY - Mar­ian Fin­negan is a direc­tor and chief econ­o­mist with Sherry FitzGer­ald

The lat­est data from Cen­sus 2016 makes for very in­ter­est­ing read­ing. First, the pop­u­la­tion has grown by more than ex­pected. There are now 4.76m peo­ple liv­ing in Ire­land. Sec­ond, there are 2m res­i­den­tial dwellings in Ire­land, an in­crease of 8,800. Third, and per­haps most no­tably, the av­er­age house­hold size has in­creased. This is a rev­er­sal of a long-term trend of a decline in av­er­age house­hold size.

Clearly, the de­mand for hous­ing has grown by sig­nif­i­cantly more than sup­ply. The mar­ket has ad­justed by sim­ply in­creas­ing the num­ber of peo­ple liv­ing in many dwellings. This is clearly not a good so­lu­tion for a mod­ern suc­cess­ful econ­omy.

The shortage of sup­ply is per­haps most notable in the pri­vate rented sec­tor. In 2011, there were 305,377 oc­cu­pied house­holds liv­ing in pri­vate rented ac­com­mo­da­tion. Dur­ing the same month, Daft.ie had 18,690 prop­er­ties ad­ver­tised to let. It would be im­pos­si­ble to de­ter­mine what mar­ket share Daft.ie had at that time, but let’s as­sume, for ar­gu­ment’s sake, it is 50pc. That would sug­gest that there were 37,380 rented units avail­able in April 2011. This is not an un­rea­son­able fig­ure, as it rep­re­sents 16pc of the va­cant stock.

By 2016, there were 309,728 oc­cu­pied house­holds in pri­vate rented ac­com­mo­da­tion. How­ever, there were only 3,950 units ad­ver­tised on Daft. ie. Un­der the same as­sump­tions, this sug­gests a to­tal stock of 317,628. As such, the avail­able rental stock has fallen by ap­prox­i­mately 25,000 units.

This stock is­sue is sup­ported by our anal­y­sis of ven­dor and pur­chaser trends. Typ­i­cally, for ev­ery new in­vestor buy­ing into the mar­ket, two ven­dors were ex­it­ing. This is the great­est chal­lenge for the mar­ket. It’s es­sen­tial that the stock of rental ac­co­mo­da­tion is in­creased if we are to pro­vide choice to ten­ants and sta­bilise rental in­fla­tion.

Fi­nally, per­haps the most in­trigu­ing data in Cen­sus 2016 is what is miss­ing. Af­ter the re­lease of the 2011 Cen­sus data, much was said of the 230,000 va­cant units. Some com­men­ta­tors even sug­gested that it would take decades for the mar­ket to ab­sorb this stock. Those of us who dis­agreed were scorned. The lat­est Cen­sus fig­ures re­veal a decline in va­cant stock to 183,000 units. How­ever, we still know lit­tle about this stock.

An anal­y­sis of enu­mer­a­tors’ notes does give a lit­tle in­sight into a sam­ple of this data, but we do need a much more com­pre­hen­sive anal­y­sis.

It is only by gath­er­ing and analysing qual­ity data that pol­i­cy­mak­ers can prop­erly plan and leg­is­late for a fu­ture sta­ble hous­ing mar­ket. Per­haps if this had been avail­able five years ago, we would have a very dif­fer­ent mar­ket to­day.

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.