11,000 new houses built as 300,000 still lie empty
Report warns 120,000 unlikely ever to be sold
Published 30/07/2010 | 05:00
THOUSANDS of homes across the country are still being built -- as a new report warns that 120,000 existing houses are unlikely ever to be sold.
New figures show developers started work on almost 11,000 homes in the last 15 months -- at a time when the property market has collapsed, more than 600 'ghost estates' lie empty and there is a glut of 300,000 unwanted properties.
A report into the property bubble says that of the 300,000 homes lying empty, as many as 120,000 homes are unlikely to be sold in the future. And most of these are in counties Roscommon, Cavan, Leitrim and Sligo.
Property experts say some developers are gambling on building in what they feel are the right locations for cheaper prices. But if the gamble fails, and there are no takers, there will be even more empty homes.
Environment Minister John Gormley is powerless to halt the building splurge, fearing legal action if he imposes a moratorium on any new homes being constructed.
The building of new apartments and houses also comes despite a massive reduction in house prices, major difficulty in getting mortgages and a surge in home repossessions.
New figures show work has begun on 10,942 homes since the start of 2009 -- with more than 7,000 new homes completed this year. While nowhere near the boom levels of almost 90,000 units, the level of building is still extremely high considering the state of the property market.
The Central Statistics Office (CSO) figures show that in Co Roscommon, for example, which has 35 ghost estates, more new homes (161) were built than in the more populous Dun Laoghaire-Rathdown (149) area which has 10 ghost estates.
Yet, despite this, developers are still willing to take a gamble and have been busy building homes in these counties and others which have the greatest oversupply.
In addition to the almost 11,000 new units, thousands more have also been granted planning permission in the past year, meaning that developers are free to begin work on new schemes.
The figures come as a new study from NUI Maynooth says more than 300,000 vacant units are dotted in 620 ghost estates across the country, with a potential oversupply of 120,000 homes.
The study from the National Institute for Regional and Spatial Analysis (NIRSA) found that reckless planning decisions have left one in six houses uninhabited for most of the year in 620 unfinished estates.
It is expected that many of the unsold units will be leased for social housing purposes, meaning the taxpayer could pick up the tab for the reckless pace of development.
The study's author, Professor Rob Kitchin, said there was "quite clearly" no need for more homes to be built in the State in the immediate future.
"The biggest problems are in counties like Leitrim, Roscommon, Longford, Sligo, Monaghan and Cavan," he said.
"Where we think construction needs to take place is for public infrastructure like public transport, schools, water treatment plants and broadband. We're not convinced about houses." The report demands an inquiry into the planning system, saying that generous tax breaks "greatly exacerbated" the situation and that counties with the most vacant stock in 2006 later built the most new housing in the following four years.
They now have the highest levels of oversupply, and have the most land zoned for future use.
Just six local authorities -- Fingal, Kildare, Galway city, Meath, Wicklow and South Dublin -- employed "relatively sensible planning" during the boom years.
The decision by many developers to continue building comes as the Permanent TSB/ESRI house price index published yesterday shows that while the rate of decline is slowing, house prices are still falling.
Prices are now down 35pc from their peak in 2006. Prices are now back to 2002 levels.
Around 1,800 developers are expected to go into the State's bad bank NAMA, but hundreds more are willing to risk building new homes in counties where there is no demand.
Industry sources said that some of the 300,000 units were in locations far from roads, public transport and amenities, meaning they would take longer to sell.
Developers have a legal right to build homes on foot of a grant of planning permission.
"There's nothing that the minister can do in relation to those consents already granted," a department spokesman said.
However, changes to the planning acts, signed into law by President McAleese on Wednesday, would give local authorities the power to refuse permission if there was an excess of empty units, he added.
Currently, city and county managers cannot refuse an application on the basis there is excess housing already available.