New Dwelling Completions Q1 2018

Planning permissions up 26.9% in 2017

Planning permissions were granted for 20,776 dwelling units in 2017 compared with 16,375 in 2016, an increase of 26.9%. The trend over the period is line with the New Dwelling Completions series as shown in Figure 6.1. Each planning permission gets a unique planning ID covering all the dwellings in that permission which can ideally be linked to further stages of the development. However, as unique identifiers are not consistent across local authorities this has made it difficult to reuse them in subsequent stages of the building process. As all developments except local authority building where construction takes place in the authorities' own area is included in the series, planning permissions granted are a good indicator of future projects and of confidence in the housing sector. However as all planning permissions have a long life-time prior to expiry (which can be extended) and in any event the permission may never be executed, they can exhibit over-coverage and cannot be directly used as an indicator of building activity. 

Geodirectory

Once construction has commenced on a dwelling, it will be recorded as ‘Under Construction’ in Geodirectory,¹ the source for Eircode which contains a vast database that combines data acquired from An Post and Ordnance Survey Ireland. Once construction is completed and mail is being delivered to a dwelling, its status changes and becomes a regular entry into the Geodirectory. A shortcoming of the Geodirectory is its time lag where the database is only updated on a quarterly basis in response to annual interviews with postmen delivering mail within assigned areas which can lead to inconsistent numbers of new residential addresses being added to the database as illustrated in Figure 6.2. In 2017, this has increased by 169% compared to the previous year. New residential addresses are high in previous years also as the Geodirectory will include some houses under construction as well as a number of the UFHDs and reconnections.

Revenue

eStamping

All transfers of ownership of residential properties in the State must be referred to the Revenue Commissioners for stamp duty assessment under the Stamp Duties Consolidation Act (SDCA) 1999.  The data includes a flag indicating if the dwelling is a new or second-hand property. The volume of stamp duty paid on new dwellings increased by 24% in 2017 over 2016. Figure 6.3 illustrates that the trend in new dwelling transactions is comparable to the New Dwelling Completions series. However, the new CSO series on New Dwelling Completions cannot be compared directly to the data on stamp duty as the Revenue data does not include self-builds where no transfers of ownership take place. Furthermore, a new build according to Revenue is one that has never been occupied, rather than a recently constructed building. Thus, unfinished dwellings that are now being sold constitute a new dwelling in the Revenue series.

As part of the completion of the Residential Property Price Index (RPPI), eStamping data are matched by the CSO to Building Energy Rating (BER) data, compiled by the Sustainable Energy Authority of Ireland (SEAI). This allows the linking of ESB connections to the eStamping data using the BER Reference Number as the linking variable. We can then determine that the time lag between a new dwelling being connected to the ESB network and the execution of stamp duty is about six months on average, (with a median of 53 days). This time lag further restricts the use of eStamping as a reliable source for estimating new housing completions.

Figure 6.4 excludes one-off dwellings from the new dwellings series but includes UFHDs which closes the gap between the two series as the series are now more comparable.

Help-To-Buy Scheme

The Help-to-Buy Scheme (HTB) is designed to help first-time buyers of newly built homes to assemble the required deposit, where a new build is defined as a dwelling that has not been previously occupied. Thus the same issues affecting the eStamping data also arise with the HTB scheme as UFHDs that are now being sold and occupied for the first time are included in the HTB scheme. A further complication is that only a very small percentage, (less than 5%), of dwellings in the HTB scheme can be linked using the Eircode. Figure 6.5 summarises data from the New Dwelling Completions series and data published by Revenue. It shows that the CSO is significantly higher than the Revenue series as not all dwellings are purchased by first-time buyers and not all buyers will qualify for the scheme.

Local Property Tax

The Local Property Tax data, which is also available from Revenue, are also not suitable to use as a new dwelling indicator at this time because of exemptions for new builds since 2013.

Protect Our Water

All dwellings with a private waste water treatment system are required to register their septic tank using the Protect our Water (POW) registration system. However, there can be a significant delay between the completion of a dwelling and the decision to register the septic tank. Notwithstanding this delay, Figure 6.6 below shows how the number of new builds closely follows that of POW registrations over the last three years. The POW data could therefore be a valuable indicator to identify single developments. Currently the POW system includes the MPRN which could be used to link ESB connections with Protect Our Water registrations. However, the coverage is poor and there are plans to drop this identifier from the application process.

Production in Building and Construction Index

A Building and Construction Index is produced by the CSO each quarter which monitors trends in both the value and volume of production in building and construction. The volume part of this index had an increase of 25.4% in the annual volume of production between 2016 and 2017 for residential building. The New Dwelling Completions series from the CSO closely follows that of the Volume of Production Index for the period 2011 - 2017 as shown in Figure 6.7. However, this index includes both New Construction and Repairs & Maintenance, so a direct comparison to New Dwelling Completions is not possible. 

HomeBond registrations

HomeBond provides warranties on new dwellings that cover any major structural defects over a ten year period. Registrations are normally issued one month before work commences on site and are used as a leading indicator of new housing output by the Central Bank of Ireland,² Figure 6.8 shows quarterly HomeBond registrations for scheme dwellings and apartments using a three-quarter lag. 

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¹Data taken from Geodirectory Residential Report

²See Page 17, Central Bank Quarterly Bulletin QB2 April 2018 (PDF)