Monday 11 December 2017

How big data can help the housing crisis

Amazingly, Ireland still relies on connections to the electricity grid to measure new dwellings being built. (Stock picture)
Amazingly, Ireland still relies on connections to the electricity grid to measure new dwellings being built. (Stock picture)

Ronan Lyons

Imagine a company that didn't know what assets it owned. No doubt there are plenty of sole traders who might not formally have a balance sheet, and similarly, there are plenty of companies - including big ones - that find it difficult to put a value on intangible assets like their brand. But it is hard to imagine any company that wouldn't know what real estate it owned. Particularly if that company was a multi-billion euro company.

Yet that, amazingly, is the situation Ireland finds itself in when it comes to property. True, there are national accounts that estimate the total value of various types of assets, including housing. For example, we know there are roughly two million properties in the country and we know that the average value of a property is a little above €200,000. So the total value of residential property in Ireland is those two numbers multiplied, so roughly €400bn.

But this number should be calculated from the bottom up, not from the top down. Most developed countries have what is known as a cadastre, a formal register of who owns what - and in some countries, who lives in what. This information is used for all sorts of purposes. Examples include which neighbourhoods need new schools or more hospital beds or greater provision of housing for older people.

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