Affordability, Finance and Meeting Demand: Challenges in the Irish Housing Market

AF F O R D A B I L I T Y , F I N A N C E A N D DE M A N D

Housing Agency 16 December 2015 Daragh McCarthy [email protected] 086-176-1772

E M P L O Y M E N T , I N C O M E & A F F O R D A B L E U N I T S

P R O P E R T Y P R I C E I N D E XBase=2007, M2 = 100

0

20

40

60

80

100

120

'05,

M1

'05,

M5

'05,

M9

'06,

M1

'06,

M5

'06,

M9

'07,

M1

'07,

M5

'07,

M9

'08,

M1

'08,

M5

'08,

M9

'09,

M1

'09,

M5

'09,

M9

'10,

M1

'10,

M5

'10,

M9

'11,

M1

'11,

M5

'11,

M9

'12,

M1

'12,

M5

'12,

M9

'13,

M1

'13,

M5

'13,

M9

'14,

M1

'14,

M5

'14,

M9

'15,

M1

'15,

M5

'15,

M9

Apartment (Dublin)

House (Dublin)

House (National, ex Dublin)

Source: CSO, HPM01 (2015)

P R T B R E N T I N D E X — Q U A R T E R 3 , 2 0 1 5 Base 2007=100

Source: PRTB (2015)

40

50

60

70

80

90

100

110

'07,Q3

'07,Q4

'08,Q1

'08,Q2

'08,Q3

'08,Q4

'09,Q1

'09,Q2

'09,Q3

'09,Q4

'10,Q1

'10,Q2

'10,Q3

'10,Q4

'11,Q1

'11,Q2

'11,Q3

'11,Q4

'12,Q1

'12,Q2

'12,Q3

'12,Q4

'13,Q1

'13,Q2

'13,Q3

'13,Q4

'14,Q1

'14,Q2

'14,Q3

'14,Q4

'15,Q1

'15,Q2

'15,Q3

Apartment(Dublin) House(Dublin)

Apartment(exDublin) House(exDublin)

A V E R A G E W E E K LY W A G E SSeasonally adjusted and accounting for CPI inflation—Base 2008, Q1=100

90

92

94

96

98

100

102

104

106

2008,Q

1

2008,Q

2

2008,Q

3

2008,Q

4

2009,Q

1

2009,Q

2

2009,Q

3

2009,Q

4

2010,Q

1

2010,Q

2

2010,Q

3

2010,Q

4

2011,Q

1

2011,Q

2

2011,Q

3

2011,Q

4

2012,Q

1

2012,Q

2

2012,Q

3

2012,Q

4

2013,Q

1

2013,Q

2

2013,Q

3

2013,Q

4

2014,Q

1

2014,Q

2

2014,Q

3

2014,Q

4

2015,Q

1

2015,Q

2

2015,Q

3

Source: CSO, EHQ03 (2015)

E M P L O Y M E N TSeasonally Adjusted (‘000s)

1,600

1,700

1,800

1,900

2,000

2,100

2,200

'07,

Q1

'07,

Q2

'07,

Q3

'07,

Q4

'08,

Q1

'08,

Q2

'08,

Q3

'08,

Q4

'09,

Q1

'09,

Q2

'09,

Q3

'09,

Q4

'10,

Q1

'10,

Q2

'10,

Q3

'10,

Q4

'11,

Q1

'11,

Q2

'11,

Q3

'11,

Q4

'12,

Q1

'12,

Q2

'12,

Q3

'12,

Q4

'13,

Q1

'13,

Q2

'13,

Q3

'13,

Q4

'14,

Q1

'14,

Q2

'14,

Q3

'14,

Q4

'15,

Q1

'15,

Q2

'15,

Q3

'000s

Source: CSO, QNQ03 (2015)

E M P L O Y M E N T R AT E : P E R C E N TA G E P O I N T C H A N G E2007, Q3 — 2015, Q3

-25

-20

-15

-10

-5

0

5

20-24 25-34 35-44 45-54 55-59 60-64

%


I L O U N E M P L O Y M E N T R AT E15 – 74 years of age

0

2

4

6

8

10

12

14

16

'98,

Q1

'98,

Q3

'99,

Q1

'99,

Q3

'00,

Q1

'00,

Q3

'01,

Q1

'01,

Q3

'02,

Q1

'02,

Q3

'03,

Q1

'03,

Q3

'04,

Q1

'04,

Q3

'05,

Q1

'05,

Q3

'06,

Q1

'06,

Q3

'07,

Q1

'07,

Q3

'08,

Q1

'08,

Q3

'09,

Q1

'09,

Q3

'10,

Q1

'10,

Q3

'11,

Q1

'11,

Q3

'12,

Q1

'12,

Q3

'13,

Q1

'13,

Q3

'14,

Q1

'14,

Q3

'15,

Q1

'15,

Q3

%

Source: CSO, QNQ22

U N E M P L O Y M E N T B Y R E G I O N

0

2

4

6

8

10

12

14

Bor

der

Mid

-Wes

t

Sout

h-Ea

st

Wes

t

Dub

lin

Mid

-Eas

t

Sout

h-W

est

Mid

land

Mid

land

Sout

h-Ea

st

Wes

t

Mid

-Wes

t

Bor

der

Sout

h-W

est

Mid

-Eas

t

Dub

lin

'07, Q3 '15, Q3

%


P A R T I C I PAT I O N R AT E : P E R C E N TA G E P O I N T C H A N G E2007, Q3 — 2015, Q3

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

Dublin Mid-West South-East Midland West State South-West Border Mid-East

pp c

hang

e in

par

ticip

atio

n ra

te


I R I S H H O U S E C O M P L E T I O N S , A V E R A G E P R I C E S A N D C O M PA R I S O N S W I T H I N C O M E / E A R N I N G S 1

Year No. of dwellings

completed Average house prices (€)

Relative to gross household income

Relative to gross average earnings

1995 30,575 77,994 3.43 -

2000 49,812 169,191 4.87 -

2001 52,602 182,863 - -

2002 57,695 198,087 - -

2003 68,819 224,567 4.96 -

2004 76,954 249,191 5.05 -

2005 80,957 276,221 5.41 -

2006 93,419 305,637 5.55 -

2007 78,027 322,634 5.39 -

2008 51,724 305,269 5.04 8.30

2009 26,420 242,033 4.28 6.57

2010 14,602 228,268 4.22 6.32

2011 10,480 230,303 4.35 6.41

2012 8,488 220,415 - 6.11

2013 8,301 234,301 - -

F I N A N C I N G I N V E S T M E N T

P R O J E C T E D P U B L I C S P E N D I N G P E R C A P I TAExcluding interest on public debt

12,800

13,000

13,200

13,400

13,600

13,800

14,000

14,200

2014 2015 2016 2017 2018 2019 2020 2021

€

Source: Calculations based on figures from the Dept of Finance & CSO (2015)

P U B L I C / P R I V AT E I N V E S T M E N TCurrent prices in € billions

0

10

20

30

40

50

60

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17

€ bi

llion

s

GeneralGovernment

PrivateSector

Source: European Commission, AMECO database (2015)

P U B L I C C A P I TA L E X P E N D I T U R E O N H O U S I N GLocal authority and all other constituents—nominal amounts in €'000,000

0

500

1,000

1,500

2,000

2,500

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

Others Local Authority Housing

Source: Department of Environment, Community and Local Government (2015)

D E L I V E R Y O F N E W H O U S I N G U N I T S : 1 9 7 3 - 2 0 1 3 Average public/private Split over successive five-year periods

Source: CSO, HSA01 (2014)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

'74-'78 '79-'83 '84-88 '89-'93 '94-'98 '99-'03 '04-'08 '09-'13

94% 79% 78% 72% 92% 92% 87% 90%

Private Houses

Local authority & non profits**

F I N A N C I N G S O C I A L H O U S I N GCommon mechanisms outside the tax system2

Source: European Social Housing Observatory (2013)

County/Support Preferable loans Discount on land Grants Loan guarantee Interest

subsidy Extensive personal allowances/benefits

Netherlands - X -

X - X

Austria X -

-

-

-

-

England - X X -

- X

Germany X X X -

- X

France X X X - X X

Finland - X X X X X

F I N A N C I N G S O C I A L H O U S I N GCommon mechanisms directly using the tax system2

Source: European Social Housing Observatory (2013)

County/Support DIRT & CGT VAT Property/Site Aggregator Levies

Netherlands - - - X X

Austria X X X - X

England - X X X -

France X X X X -

Finland - X - X -

D E L I V E R Y O F N E W H O U S I N G U N I T S : 1 9 7 3 - 2 0 1 3 Average public/private Split over successive five-year periods

Source: Source: CSO, HSA01 (2014)

-20

-10

0

10

20

30

40

50

60

70

80

1993 1996 1999 2002 2005 2008 2011 2013

L A N D & F U T U R E H O U S I N G R E Q U I R E M E N T S

S U P P LY O F H O U S I N G L A N DZoned land availability

0

150,000

300,000

450,000

600,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


R E S I D E N T I A L L A N D A V A I L A B I L I T Y

Region/Availability Potential Dwellings (Area 1) Potential Dwellings (Area 2)

South West 45,611 35,746

Mid-West 66,328 36,435

South-East 77,930 58,559

Mid-East 97,089 94,349

Midlands 44,454 29,738

West 54,604 23,820

Dublin 123,451 116,705

Border 101,835 19,360


S U P P LY O F L A N D , P L A N N I N G P E R M I S S I O N & D E M A N D

Source: Society of Chartered Surveyors (2014)

County Council Zoned for residential development

Minimum housing requirement

Granted planning permission

Minimum Housing Units Required

2014-2018

Dublin City 313 13,751 2,444 13,751

Fingal 1,065 9,617 15,583 9,617

Dun Laogroire 302 3,299 6,070 3,299

South Dublin 553 8,766 2,483 8,766

Affordability, Finance and Meeting Demand: Challenges in the Irish Housing Market

Economy & Finance