According to the lending institutions (banks and NAMA) apartments are a non-runner. It is widely known in planning circles that apartment schemes will not get finance, good permissions are not being built-out, and that the institutions are telling local authorities to lower the densities. However, there is a suspicion that this ‘policy’ is based on a hunch rather than sound analysis. 3 sets of information out this week, suggest that this the lenders are getting it wrong. i.e. the Think Dublin Demoraphic Report, Social Housing Waiting lists and the Residential Property Price Index (RPPI).
The ‘Demographic Trends in Dublin’ Report came out this week, launched by the Lord Mayor, Andrew Montague. It is part of the Dublin City Council – Think Dublin! Research Series, by Declan Redmond and Brendan Williams (UCD), Brian Hughes (DIT) & Jamie Cudden, Office of International Relations and Research, Dublin City Council. This report is really important. It’s proper research, based on the latest census results (2011) with some sharp analysis. At risk of copying the entire Executive summary.....
Population growth in Dublin City over the period 1991 to 2011 has lagged significantly behind national population growth and growth in the other GDA local authorities. In the State the population increased by 30 per cent from 1991 to 2011, but by only 9.8 per cent in Dublin City. These figures reflect the rapid outward expansion of population and housing during the period of the residential property boom.
Dublin City’s share of the Dublin region’s population declined from 47 to 41 per cent between 1991 and 2011. By contrast, however, Fingal has seen its share of the region’s population increase from 15 to 22 per cent over the same period. South Dublin’s share of the population has remained static at 21 per cent while Dún Laoghaire Rathdown’s share has fallen from 18 to 16 per cent.
In contrast to the sprawl and dispersion of population described above, the inner city of Dublin has seen strong population growth. Between 1991 and 2011 the population of Dublin City increased by just 9.8 per cent. However, in the inner city there was an increase of 62% in the same period. This increase reflects the high level of apartment building in the inner city from the late 1980s onwards.
In the rest of the city there was a decrease of 1.2% between 1991 and 2011, with many electoral divisions seeing a loss of population. “ Given strong national and regional increases in population in this period, this loss of population is remarkable”.
In 2006 the average household size in Dublin City was 2.50 compared with 2.8 for the GDA. Average household size has fallen consistently since 1991. Average household size in the state has fallen from 3.14 in 1996 to 2.81 in 2006 (This was predicted long-ago in the DTI Strategy).
Almost 30% of households in Dublin City are one person households as compared with 17% in Fingal and 16% in South Dublin. By contrast, Dublin City has a much lower rate of households comprised of husband and wife with children. Only 19% of households in Dublin City were husband and wife with children compared with 33% in Dun Laoghaire, 36% in Fingal and South Dublin and almost 40% in Meath and Wicklow.
The Report notes that Eurostat projects the Irish population is to increase from 4.5 million to 6.5 million between 2010 and 2060, a 47% increase. The UK is projected to increase from 62 million in 2010 to 79 million over the same period, an increase of 27%. The German population, by contrast, is expected to fall by 15.3 million between 2010 and 2060, a decrease of 19%.
Given the severity of the recession many commentators had predicted that net emigration had returned. However, the preliminary 2011 Census figures show that there was net positive in-migration of 118, 650 in the period 2006-2011. This does not, of course, mean that there was no emigration out of the country but that more people moved into Ireland than left it.
So in contrast to many common perceptions, sprawl and dispersion have continued and the older suburbs have declined, but the inner city has done well.
Social Housing
On Tuesday the Irish Times reported that The National Asset Management Agency has drawn up a list of just over 2,000 houses and apartments which it will make available for social housing over the coming months..http://bit.ly/zDocbv.
It is notable that just 18 apartments, or less than 1 per cent of the overall total, have been identified as suitable properties in the South Dublin County Council area (reflecting their Council policy to restrict apartments below national guidance levels). By contrast, it noted 484 apartments or almost 25 per cent of the total are based in the Dublin City Council area. Fingal and Dún Laoghaire-Rathdown account for a further 408 houses and apartments, or 20 per cent of the total housing units. The big shock is the statement that the “Latest data shows the number of households requiring social housing reached a record 98,000 in 2011, up from 58,000 three years ago. All indications are that the numbers are continuing to rise”
RPPI
The Residential Property Price Index this week headlined that house prices in Dublin are 55% lower than at their height in early 2007, and apartments 59% lower.
However, this doesn’t tell the full story. The RPPI shows that the only area that experienced growth in 2011 (albeit minor) was in the apartment sector. There was 0.6% growth in the 3 months up to December. In Dublin there was 3.7% growth in the 3 months up to December and 2.4% growth in the 3 months up to January 2012.
The conclusion from this is that there is very little difference between the market performance of houses and apartments, and if anything apartments may possibly have turned a corner.
Waiting lists of the order of 100,000 units is not about some down-trodden minority that should only be catered for by subsidised housing. It suggests that the wrong type or the wrong tenure of housing has been built.
If the population needs averages households off 2.5 persons, and where the only population growth has been in the city centre apartment market (or sprawl) why is there an insistence on the good old semi-D? Does it reflect the age and status of people making these decisions or a lack of information? The whole idea of the original residential density guidelines was to make housing more affordable. This is a challenge for the market not the public sector. At the moment, it seems that the lending institutions are ignoring these important macro and micro trends and signals, and telling the market, what they think it needs.
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