With the preliminary results of Census 2011 we can start to undertake some longitudinal analysis of the headline data. Clearly a key component of the present crisis has been overdevelopment and the subsequent property crash. At a national level, whilst population increased by over a million people between 1991 and 2011 (1,055,550, 29.9%), and households increased by c.680,000[*1] (61.6%), the number of houses built in the same period was at least 869,949 (76.7% increase) (actually more given that some housing was replacement for stock that has subsequently become obsolete). What this means is that whilst the population and households rose dramatically, house building managed to run ahead of household demand. And if average household size had not been consistently falling between 1991 and 2011 from 3.46 to c. 2.7, then the level of oversupply would be significantly higher than it presently is.
One of the areas that has come under scrutiny with respect to the property crash has been the Upper Shannon Renewal Scheme area. This scheme, started in June 1998, provided tax relief or incentive allowances for development and covered Co. Cavan, west of the River Erne, all of counties Leitrim and Longford, north Co. Roscommon, east and south Co. Sligo. Figures 1 provides data on vacancy including holiday homes, housing stock, % vacant stock for 1991, 1996, 2002, 2006 and 2011, and population and household change 1991-2011 for these five counties and the state. Figures 2-4 graph these data and Figure 5 is house building per annum 1970-2009. The data aren’t ideal, in that the vacancy rate includes holiday homes, but they still give a good impression of what has happened[*2].
What the data reveal is that development in these counties, like the state as a whole, ran way ahead of population/household growth and other forms of demand (holiday/second home), especially from 2002 onwards as the Upper Shannon scheme worked to accelerate construction activity. This led to the strange phenomena of increasing population/households, increasing housing stock and increasing levels of vacancy (to over 20% for all 5 counties; base vacancy is usually expected to be between 3-6% in a normal housing market). In Leitrim, for example, the county in the state with the highest level of overall vacancy (30.4%), housing stock grew faster (8,155; 81%) than population growth (6,477; 25.6%), and nearly twice that of household growth (4,432; 53.7%) and vacancy consequently grew by 3,733 (205%) from 1,820 to 5,553 units. Roscommon and Sligo similarly built more houses than the population grew, let alone households. All five counties show a marked increase in the housing vacancy level. Even allowing for obsolescence and replacement, and demand for holiday homes, it is clear that housing was being built in excess of demand and in response to the tax incentives (as clearly illustrated by Figure 5). The result is a significant oversupply of stock and a helping hand in the collapse of the banks (see Figure 6 for vacancy levels per ED).
*1 we don’t as yet know the total number of permanent households as temporary absent and visitor data has not been released. What we do have is the total number of housing units (2,004,175) and the total amount of vacant units (294,202). If we take one away from the other, there were 1,709,973 units that usually have someone resident, which is usually within a few thousand of the reported household figure for Census night.
*2 there is also a slight discrepancy in the stock and vacancy rate data as reported in the CSO data in that 91, 96, 02 all exclude temporary absent properties in the stock figures; 06, 11 include such properties in the stock figures, but not in the vacancy figures – the difference to the stock and vacancy rate including and excluding temp absent properties is very marginal, c. 0.1-0.3%. In other words, the figures 2-4 would appear all but identical if the slight alterations were undertaken to make the data fully compatible.