As the global economy slowed and the global sub-prime banking crisis began, house price rises in Ireland started to slow in September 2006, levelled-off in March 2007, and remained static until November 2007. From December 2007 to February 2012 they fell consistently before bottoming-out and remaining stable until June 2013.
From the peak to bottom, prices fell by 57.4% in Dublin (houses 55.9% and apartments 63.7%) and 48.7% in the rest of the country. Ireland experienced one of the deepest house market collapses on record.
Between 2005 and 2007 there were 252,403 housing units completed in Ireland, with another 78,144 added in 2008 and 2009 as legacy construction slowed. This is despite the fact that the 2002 census had reported 143,418 vacant units and that, by the following census of 2006, that figure had grown to 266,322 vacant units.
Put simply, housing units had been built in excess of demand across the entire country, with a vacancy rate for the state (excluding holiday homes) above 15%. Oversupply was approximately 110,000 units.
The most visible manifestation of the oversupply issue was unfinished housing estates. The National Survey of Housing Developments reported that there were 2,846 documented unfinished estates in Ireland in 2010, present in every local authority.1 With respect to the units on these estates, 78,195 were complete and occupied, 23,250 complete and vacant, and 19,830 under construction, with planning permission in place for a further 58,025 units.
In addition to the oversupply of dwellings, there was also an oversupply of zoned land and commercial premises. In June 2008, there was 14,191 hectares of serviced zoned land in the state, enough for up to 462,000 potential new units.
In Dublin, some 782,500 square meters of office space (23%) was vacnt in 2010. Not unsurprisingly, land prices plummeted by between 75-98% in value post-2007.
Faced with high payment rates on their mortgages, many households struggled to keep up with payments. In Q3 2009 3.3% of principal residence mortgages (26,700 mortgages) were in arrears by more than 90 days. By Q3 2013 this had peaked at 12.9% (98,763 mortgages), with 18.4% in some level of arrears (141,269 mortgages).
SWith respect to buy-to-let mortgages, 21.2% (31,178) were in arrears of more than 90 days, with 27.4% (40,426) in some level of arrears in Q3 2013.
The huge house price rises in the Celtic Tiger years, followed by the financial pressures of the crash, had significant spillover effects with respect to social housing demands and homelessness. In 1999 there were 39,176 households on the social housing waiting list, rising to 98,318 in 2011. The vast majority of people on this list are there because they cannot afford private rental accommodation, or to purchase a home of their own.
During the crisis, planned investment in Traveller accommodation nationally also stalled. In 2013, there were 361 Traveller families living on unauthorised sites, and 5574 in various types of local authority housing.
This extended data story is an updated and modified version of:
Kitchin, R., Hearne, R. and O’Callaghan, C. (2016) Housing.
In Roche, W.K., O’Connell, P. and Prothero, A. (eds) Austerity and Recovery in Ireland: Europe’s Poster Child and the Great Recession.
Oxford University Press. pp. 272-289.