New housing data justifies criticism of Government numbers

The Central Statistics Office’s new housing output numbers appear to have finally put to bed the controversy surrounding the Government’s figures, one that has been raging on the sidelines of the current crisis for several years.

The CSO’s new data set, which will now be produced on a quarterly basis, brings us closer to understanding what’s going on in arguably the most contentious sector of the Irish economy, and lays out in lucid detail just why there is such pent-up demand in the market.

The Government originally estimated that more than 84,000 new homes had been delivered between 2011 and 2017 – this in itself is nothing in the context of annual demand that’s estimated at about 35,000 – but now we’re told the figure was closer to 53,000. This equates to an overstatement of nearly 58 per cent.

The calamitous fall-off in residential construction since the crash is perhaps best illustrated by juxtaposing the 53,000 figure for seven years with the 92,000 housing completions recorded in 2006. Is it any wonder we’re in the midst of such a severe crisis? The crash in the Republic’s economic fortunes did not stop a new generation of young people needing homes.

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Faulty measure

Former housing minister Simon Coveney inherited a faulty measure of housing output, one based almost completely on electricity connections, but instead of accepting its limitations he persisted with it until the facts on the ground made it untenable.

Above all, the CSO new data justifies the criticism directed at the Government's numbers. Dublin architect Mel Reynolds, Dublin Institute of Technology lecturer Lorcan Sirr and University College Dublin lecturer and architect Orla Hegarty deserve most credit in exposing the data's limitations.

Without their efforts, it’s unlikely we’d have the CSO producing this data, placing policymakers in a better position to make decisions.

While the focus from here on in will be on the headline output number – 14,500 last year – it’s worth noting that the stock of homes in the State did not increase by that number as a certain cohort of housing is continually becoming obsolete.

So the real addition in 2017 was probably closer to 10,000, reflecting the gargantuan task ahead of the State if wishes to adequately address the current crisis.

The new figures also provide interesting detail on the type of new units coming on stream – last year 58 per cent were part of schemes, 28 per cent were single units while 14 per cent were apartments. Whether that mix is right one is another question.