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New ghost estates are in store due to overestimating demand

Leading economists warn that overestimating how many new homes are needed in Ireland will lead to a very real danger of more new ‘ghost estates’ being built. 

Savills has conducted new research that shows demand for new houses may have been overestimated by as much as 13,000 units. This is roughly a third of the overall estimation. This may result in a whole new range of ghost estates being built. 

In an article by the Irish Independent, Donal O’Donovan states: 

A consensus that 35,000 to 40,000 new homes must be built every year to meet new and existing demand is based in part on estimates that 6,000 to 16,000 homes are lost through demolition and dereliction each year and must be replaced.

However, the research that has been carried out by Savills chief economist John McCartney shows that the amount of demolitions is far lower than estimated and they are mostly in rural areas where there is very low demand for housing. McCartney found there are no more than 4,000 units a year lost through demolition. 

The demolition rates vary widely from Co. Longford to Co. Kildare. Co. Longford sees about 1 in every 200 homes are demolished where there are just 1 in every 2,000 homes demolished in Co. Kildare. 

McCartney’s figures suggest less than 3,000 replacement homes are needed a year. According to the article, “if correct, a relatively smaller boost to housing supply where demand is greatest will have a big impact, including in Dublin and its commuter belt.”

Enda Mc Guane of Winters Property Management said:

“It’s hard to believe that we still can’t produce accurate forecasts for housing.”