36% hike in the building of new houses is good, but not good enough
The building of new homes is on the increase, according to GeoView report, with a percentage increase of 36% in the past 12-month period, but the construction industry needs a bigger boost, especially with a quarter of all construction concentrated in Dublin.
The GeoDirectory is a database of all buildings, both residential and commercial, that is composed and operated by An Post and Ordnance Survey Ireland. The report indicates that some 5,966 buildings were currently under construction by the end of June 2017, an increase of over 1,500 on last year’s figures of 4,375.
CEO of GeoDirectory, Dara Keogh, confirmed a sharp increase in construction but noted that this is focussed on Dublin where the market is struggling to keep up with growing demand. Other areas of Ireland are less fortunate, with some western counties fighting against high numbers of vacant properties.
While the GeoDirectory indicates a dramatic fall in unused houses and other buildings, this is partially due to a change in how the database identifies and classifies vacancy. Criteria for vacant property include whether the post office delivers to the property and excludes holiday homes.
While the census held in April 2016 indicated 12,3% of all stock was vacant, amounting to a total of 183,312 buildings, the GeoDirectory’s report showed statistics of 96,243 unoccupied dwellings, just 4.9% of the total.
“By evaluating how GeoDirectory defines a vacant property, we have reached a figure of 96,243 vacant address points; this is almost 50% lower than previously reported and we believe this is much closer to the true figure,” Mr Keogh said.
The highest vacancy rates occur in Leitrim with 16.61%, followed by Roscommon at 13.88% and Mayo with 13.06%. Dublin and its surrounding counties enjoy the lowest percentages in terms of unoccupied properties with Dublin standing at 0.89%, Kildare at 1.99%, Meath at 3.35%, Wicklow at 2.65% and Louth at 3.61%.
Other indicators confirm the strength of the property market and suggest that construction activity needs to intensify considerably. Over the year, up until May 2017, 43,767 transactions took place in residential stock but few of these were new buildings.
“As of June 2017, there were 1,967,698 residential dwellings across the Republic of Ireland,” said Annette Hughes, director of DKM Economic Consultants.
“With 43,767 property transactions in the year, there was a turnover rate of 2.22%; 90% of the properties transacted were second-hand dwellings.”
The construction industry needs to take a leap of faith if it is to meet with the demand for new properties.