Is Ireland's housing crisis a myth?

[schmittel]

We're bombarded by the media, politicians and talking heads telling us we have a chronic housing crisis because we simply don't have enough houses.

But if you had never read an article, or heard an interview on the subject, and just looked at the plain numbers you'd think we have plenty of houses:

In the EU in 2019, 17.2 % of the population were living an overcrowded home. In Ireland it is 3.2%
In the EU in 2019, a third of the population (33 %) lived in an under-occupied home - ie too big for their needs. In Ireland, 69.6% of people live in an under-occupied home.
We have one of the largest number of rooms per person - Ireland 2.1 vs EU average 1.6 - https://ec.europa.eu/eurostat/cache/dig ... ml?lang=en

According to the 2016 Census we have a national vacancy rate of about 9%. In parts of Dublin it is well over 10%. In a healthy market you'd expect a rate of about 6%, in crisis stricken market you'd expect it to be more like 3%.

So if our houses that are actually occupied, are way below average in the overcrowding stakes, and way above average in the under occupied stakes, and the rest of the houses are empty, how can we have a shortage of houses?

The numbers to back up a shortage of houses simply don't exist.

[TheValeyard]

I've mates in well paid jobs struggling to find homes in their any reasonable price range without been saddled with a crippling mortgage debt. So it's definitely not a myth. But there is a bit of house snobbery going on. Some people just dont want to live in some areas and they may have very good reasons for that.

[schmittel]

I've mates in well paid jobs struggling to find homes in their any reasonable price range without been saddled with a crippling mortgage debt. So it's definitely not a myth. But there is a bit of house snobbery going on. Some people just dont want to live in some areas and they may have very good reasons for that.

Sure there are a lack of houses for sale at the minute but that’s different to saying we don’t have enough houses full stop and the only way to solve the problem is to build more.

[Hairy-Joe]

Personally I reckon it's been blown out of proportion by certain politicians for quick political gain. Now as this portion of politicians has said it so much, it's becoming a monster that people are believing and they are looking for their free house NOW!

I think they don't realise that if free houses are to be paid for. They are paid for by taxes and if everyone is to get a free house, EVERYONE pays for it (and therefore no longer free).

It will be a political mess with no party able to give what they promise with free houses for all. It will cause major problems for years.

I also think that it also feeds into this "I'm entitled to...." culture and demanding it now. As they shout and there's more shouting, people get less of the pie. I can see this with friends of mine who has one kid that has special needs. The kid needs support (really does) and because of so many people shouting for "their darling who has ADHD" (self diagnosed and not related to the poor parenting), the slice of the pie must be cut smaller. Consequently, the kid who needs the support can't get it.

Also, why are we giving houses to people in the middle of the cities (where it's most expensive) to long term unemployed? They don't need to live in the middle of town for work? They don't work so why can't the get their free house in small country towns?

At the moment, it's smucks like me who are paying for two houses from their wages (my own and a free one through my taxes) who are getting shafted by the "housing crisis".

Edit - forgot to say that there are a lot of people not prepared to make the sacrifice needed to pay for the house. When I moved in first, the house needed major work (it was a student house!). All I could afford was the kitche, bathroom and bedroom. I saved hard for 2 years to afford to do up the other rooms (yes I had no couch for 2 years). That meant no nights out, no take-aways, no holiday. I decided having a couch in MY house was more important than the take-away coffee

[JayRoc]

Someone made the good point about the water charges issue being unusual in Irish Politics in that (for whatever reason) it united almost every demographic. That was why it got such traction.

The Housing Crisis is certainly real, but there are a lot of people who it doesn't effect. Older home owners etc.

You could just as easily call it an Affordability Crisis but it exists alright.

And as far as I understand economics, if you increase supply of a given commodity, the overall price drops. So building more houses presumably makes sense if we want them to cost three times the average industrial wage or whatever the daft lending rules are.

I certainly haven't a hope of buying a house the way things are but I have been renting for twenty years.

[JayRoc]

Personally I reckon it's been blown out of proportion by certain politicians for quick political gain. Now as this portion of politicians has said it so much, it's becoming a monster that people are believing and they are looking for their free house NOW!

I think they don't realise that if free houses are to be paid for. They are paid for by taxes and if everyone is to get a free house, EVERYONE pays for it (and therefore no longer free).

It will be a political mess with no party able to give what they promise with free houses for all. It will cause major problems for years.

I also think that it also feeds into this "I'm entitled to...." culture and demanding it now. As they shout and there's more shouting, people get less of the pie. I can see this with friends of mine who has one kid that has special needs. The kid needs support (really does) and because of so many people shouting for "their darling who has ADHD" (self diagnosed and not related to the poor parenting), the slice of the pie must be cut smaller. Consequently, the kid who needs the support can't get it.

Also, why are we giving houses to people in the middle of the cities (where it's most expensive) to long term unemployed? They don't need to live in the middle of town for work? They don't work so why can't the get their free house in small country towns?

At the moment, it's smucks like me who are paying for two houses from their wages (my own and a free one through my taxes) who are getting shafted by the "housing crisis".

Edit - forgot to say that there are a lot of people not prepared to make the sacrifice needed to pay for the house. When I moved in first, the house needed major work (it was a student house!). All I could afford was the kitche, bathroom and bedroom. I saved hard for 2 years to afford to do up the other rooms (yes I had no couch for 2 years). That meant no nights out, no take-aways, no holiday. I decided having a couch in MY house was more important than the take-away coffee

Also, with all due respect, I think repeatedly saying "free houses" comes off a bit silly.

The people I know affected by the housing crisis have all got jobs and all we want is to be able to own our own home at a reasonable price.

[Hairy-Joe]

Also, with all due respect, I think repeatedly saying "free houses" comes off a bit silly.

The people I know affected by the housing crisis have all got jobs and all we want is to be able to own our own home at a reasonable price.

Yes I know I was being slightly over the top with the "free house".

However, the affordability problem is being swamped by the people looking for the social house (free house). Only recently has people started to call it "social and affordable".

I see it at work, two people in their late 20's. One has bought her house on her own and the other is constantly complaining he can't afford it. The person who bought got sick of the complaining by the other one day and told him if he copped on and saved he could afford it. Not spending €100 on the weekend out for a year is €5K saved is what she said (after he mentioned the weekend bender he was on a few moments earlier)

I have to laugh when I see a vox-pop with people saying they can't afford X or Y and they have a cup of coffee in their hand.

Before you start jumping up and down, before I bought my house, I moved job to get to an area that the rent was cheaper. I moved away from friends, family, etc. That was so I could save. A lot of people won't sacrifice any of their lifestyle to afford a house whereas I will.

I know I come across as a bit of an old crank but I acknowledge there are massive problems on the supply side (planning, objections, anti-social behaviour, infrastructure, skilled workers, etc)

[Turning Corners]

Home ownership for a lot of people seems so out of reach that they just say feck it and end up renting long term or have to avail of social housing and enjoy their lives via whatever they need to do - nights out, travel, avocado toast etc. It's difficult to get a mortgage, difficult to get a suitable place within commutable distance to work and difficult to save the deposit required unless you have help from family.

We moved from a city centre apartment to living with my mother for a few years, straight after we got married and had a child. We bought our own home last year before 'peak madness'. We were lucky. Many don't have the option of moving to their family home and are on median or sub-median wage. Many of my friends in their 30s or 40s, all employed, won't own a home until their parents die. And they're not wanting a detached house in Blackrock. They just want something affordable and in decent nick within commutable distance to work. Why is this so unattainable for those who work hard and pay their dues?

Two reasons: international funds buying up entire developments for rent that they're happy to leave vacant until they get the desired rental income and Irish political parties pandering to the Jacintas and Decos who want their 4eva home next to ma within a few Kms of city centres. It's a complete joke.

Imagine if all those apartments in cities were on the market for purchase. How vibrant our cities would be with young working couples and families. Instead they have to live with their parents or commute in from surrounding counties while someone who has sat on their hole since they could walk gets a prime property in a prime location, and paying the measly sum of rent is more or less optional.

[DeletedUser]

I think the most annoying thing about all this is there are working people commuting for hours to get to a job in Dublin where property in the area is given to scrotes who’ll never contribute a thing.

[scooby]

We absolutely have a housing crisis - its multi-factorial but the largest factor is housing being used as a store of wealth.
Investment funds & joe soap keeping houses empty and using them as stores of wealth.

We also need a proper derelict/vacant unit tax in this country too, in addition to vacant sites. So many houses run down in towns and cities across the country, but not put up for sale. The owners can let it fall to ruin, while watching the value tick up and up. €€€€€

[schmittel]

We absolutely have a housing crisis - its multi-factorial but the largest factor is housing being used as a store of wealth.
Investment funds & joe soap keeping houses empty and using them as stores of wealth.

We also need a proper derelict/vacant unit tax in this country too, in addition to vacant sites. So many houses run down in towns and cities across the country, but not put up for sale. The owners can let it fall to ruin, while watching the value tick up and up. €€€€€

Totally agree with this, and that's the point I'm making in the OP.

The current crisis is caused by a shortage of houses for sale/rent because "Investment funds & joe soap keeping houses empty and using them as stores of wealth" and not because we don't physically have enough houses.

But this crisis is not as severe as we're led to believe because the underlying causes could be fixed quite quickly if the political will to do so was there.

[JohnBarnes]

Also, with all due respect, I think repeatedly saying "free houses" comes off a bit silly.

The people I know affected by the housing crisis have all got jobs and all we want is to be able to own our own home at a reasonable price.

I do get you, but it's not a uniquely Irish problem and seems to be afflicting most of the "Western" world.

It is a very very difficult problem to solve, and the disproportionate focus on social housing, means reduced supply for those who want to buy at a "reasonable price".

People like you don't have enough of a voice in the media/parties on this

[schmittel]

I do get you, but it's not a uniquely Irish problem and seems to be afflicting most of the "Western" world.

It is a very very difficult problem to solve, and the disproportionate focus on social housing, means reduced supply for those who want to buy at a "reasonable price".

People like you don't have enough of a voice in the media/parties on this

We do have a fairly unique problem in that the government keeps pumping money into all forms of social housing - including HAP - thus pushing prices up thus requiring the government to pump more money into social housing.

To illustrate this consider the fact that our housing costs are the highest in Europe - https://ec.europa.eu/eurostat/cache/dig ... ml?lang=en

The highest housing costs in 2019 compared to the EU average were found in Ireland (77 % above the EU average)

BUT... consider this in the context of the housing cost burden:

With house prices and rents rising, the cost of housing can be a burden. This can be measured by the housing cost overburden rate, which shows the share of the population living in a household where total housing costs represent more than 40 % of disposable income. In the EU in 2019, 11.8 % of the population in cities lived in such a household, while the corresponding rate for rural areas was 7.0 %

The figures for Ireland are 6.9% for cities and 1.8% for rural. https://ec.europa.eu/eurostat/cache/dig ... ml?lang=en

The only way to explain the fact that we have, by some distance, the highest cost of housing in the EU, but are well below average in terms of housing cost overburden is that the overburden figures include the huge subsidies paid for out housing by the government.

And these figures are from 2019. The governments social housing spend has rocketed since then.

[scooby]

The only way to explain the fact that we have, by some distance, the highest cost of housing in the EU, but are well below average in terms of housing cost overburden is that the overburden figures include the huge subsidies paid for out housing by the government.

And these figures are from 2019. The governments social housing spend has rocketed since then.

The number of professional house shares in Ireland would dilute this stat though surely?
A house full of professionals earning decent money and splitting the rent 3/4/5 ways between them dont have a large housing burden - though if they rented individually (or with a partner) then they definitely would.

[schmittel]

The number of professional house shares in Ireland would dilute this stat though surely?
A house full of professionals earning decent money and splitting the rent 3/4/5 ways between them dont have a large housing burden - though if they rented individually (or with a partner) then they definitely would.

To some extent no doubt, but they'd need to be a pretty significant majority of households to explain our 77% above the average housing cost but approximately 50% below the average housing cost overburden dynamic.

And the latest Threshold private rental survey doesn't support the idea that they are in the majority. https://www.threshold.ie/assets/files/p ... cument.pdf

Only 6% of renters earn more than 45k, and only 38% are single with no children.

Almost 50% of renters receive HAP or rent supplement. Bear in mind these are over and above the social housing tenancies.

I'd guess the stats are skewed like a barbell - all the weight on one end with the large number of people who own property outright, and at the other end with large number of people subsidised by the state in some form or another.

As ever it is those in the middle who are getting screwed.

[scooby]

Almost 50% of renters receive HAP or rent supplement.

!!! Wow I didnt think it would be anywhere near 50% - the market is certainly distorted by this then.
I assumed like 15-20% max (excl social housing).

Will they ever cut back on HAP etc? I cant see it happening, it would be political suicide despite it making rents cheaper if they did it.
The optics make it unpalatable, which means HAP etc will only ever increase - and so will market rents?

[schmittel]

!!! Wow I didnt think it would be anywhere near 50% - the market is certainly distorted by this then.
I assumed like 15-20% max (excl social housing).

Will they ever cut back on HAP etc? I cant see it happening, it would be political suicide despite it making rents cheaper if they did it.
The optics make it unpalatable, which means HAP etc will only ever increase - and so will market rents?

Totally agree. The best thing the government could do for the housing crisis is cut the HAP etc rates. But they never will.

And on and on it will go, increasing purchase prices as well as rents.

[mugball]

!!! Wow I didnt think it would be anywhere near 50% - the market is certainly distorted by this then.
I assumed like 15-20% max (excl social housing).

Will they ever cut back on HAP etc? I cant see it happening, it would be political suicide despite it making rents cheaper if they did it.
The optics make it unpalatable, which means HAP etc will only ever increase - and so will market rents?

In fairness most of us would instinctively imagine it would be in the region of 15-20%, and that's part of the problem. It seems so insane that the government is subsidising 50% of all private rented tenancies that people assume it is not happening.

But once you realise the scale of the governments involvement in the market it is pretty obvious that they are the driving force of the high rents.

[kadman]

Not sure if its still the case for social housing guidelines. But back in the day when I was involved at steel and timberframe design,
there was a way of circumventing the requirement to build social housing on a site of ours if we wanted to.

I think it was some method whereby we could offset the requirements by either paying back funding, or funding them elsewhere.
Not sure which though as that area was well outside of my brief. But whenever I asked about our SH input,
I was politely told, WE dont need to do that

[mugball]

Not sure if its still the case for social housing guidelines. But back in the day when I was involved at steel and timberframe design,
there was a way of circumventing the requirement to build social housing on a site of ours if we wanted to.

I think it was some method whereby we could offset the requirements by either paying back funding, or funding them elsewhere.
Not sure which though as that area was well outside of my brief. But whenever I asked about our SH input,
I was politely told, WE dont need to do that

That was widespread, developers could just buy out the requirement. Changing that was the reason for the updated Part V regulations.

Compliance with Part V is why you have local authorities paying 700k+ for apartments in South Dublin to house the unemployed, when those who work are told they'll need to commute! The intentions are sound but the unintended consequences must be hard to take if you're priced out of these developments.

[schmittel]

Hope nobody minds me bumping this thread, it's still a pretty topical subject!

And now we have the 2022 Census numbers I was looking at some more data that I read, prompted by a discussion elsewhere, and once again keep coming back to the same point I made in the OP - the data doesn't support the anecdotes and the headlines that we have a shortage of housing.

For example:

According to the CSO the total housing stock is 2,124,590 and the average household size is 2.75 in Ireland.

Total housing stock 2,124,590 x Average household size 2.75 = 5,842,622 total housing person capacity.

And the population is 5,123,536.

So on the face of it based on average household size we have "spare" capacity for 719,086 people. Or to put it another way - 719,086 / avg household size 2.75 = 261,485 spare housing units.

Obviously it is not that simple because in order to facilitate a healthy turnover of stock in a functioning market you need some vacant spare capacity at all times - this is in the region of 6% of housing stock equating to 127,475 units.

261,485 spare housing stock - 127,475 base rate vacancies = 134,010 oversupply

So what is wrong? The data or the headlines?

0099001_Census_Publicity_Preliminary_Results_Infographic_ENG.jpg (174 KiB) Viewed 1806 times

[Hairy-Joe]

"Would you stop putting stats and numbers that bursts my argument that's there's not enough houses?"

Schmittel, I'd wonder at the distribution of the extra spaces. Is it where people want to live in the cities?

[schmittel]

"Would you stop putting stats and numbers that bursts my argument that's there's not enough houses?"

Schmittel, I'd wonder at the distribution of the extra spaces. Is it where people want to live in the cities?

I've been trying to find some figures to do the same calculation for Dublin, but the numbers are harder to come by.

Whilst searching I discovered that in 2006 during a housing supply boom we had 417 properties per 1000 inhabitants and today in a housing supply crisis we have 413 properties per 1000 inhabitants.

[schmittel]

Found the figures for Dublin after a bit of clicking around.

Total housing stock 571280 x Average household size 2.73 = 1,559,594 total housing person capacity.

And the population is 1,450,701

So on the face of it based on average household size we have "spare" capacity for 108,893 people. Or to put it another way - 108893 / avg household size 2.73 = 39,887 spare housing units.

Obviously it is not that simple because in order to facilitate a healthy turnover of stock in a functioning market you need some vacant spare capacity at all times - this is in the region of 6% of housing stock equating to 34,277 units.

39,887 spare housing stock - 34,277 base rate vacancies = 5,610 oversupply

So not quite as damning. Oversupply is only about 1%, a rounding error in such matters.

But bear in mind it is oversupply nonetheless. The 6% base rate spare capacity is what you would expect in an efficiently functioning market with a healthy turnover leading to a healthy supply of sales and rental stock.

The data for Dublin does not support the anecdotes and headlines of a crisis either. These are figures you'd expect if everything was ticking along normally.

So the same question applies - what is wrong? The data or the headlines?

[isha]

So the same question applies - what is wrong? The data or the headlines?

Just an uneducated passing thought - is there a fairly large, elderly/middle aged, single -occupancy demographic in Dublin?