HOME OWNERSHIP AND RENT RATIOS IN IRISH TOWNS, 1946 - 2006: OPENING NOTES
Jun 18th, 2010 by Conor McCabe
First of all, as always, the caveats.
This graph is based on dwellings in Irish towns of 1,500 people or more. The reason for that is because the Land Acts skewer home ownership as farms are both a home and a livelihood.
By removing farms from the picture, it’s possible to get a glimpse at house/apartment purchases and rentals in Ireland over a 60-yr period, but to stress again, this is a picture of urban/town living and not of the entire state during those years.
There is a myth that house-ownership is part of our DNA - a kind of Celtic mortgage double-helix. This is put into perspective with the home ownership figures from Eurostat.
These are national figures for 2006, rather than town-only figures as above, so home ownership is slightly higher (at 79% in 2006) than the figures used above (75% for towns in 2006).
This graph points to a European-wide approach to home ownership.
Certainly, in Irish towns home ownership only surpasses the 50% mark in the early 1970s, and breaches 60% in the early 1980s, and that’s after fifteen years of government-backed home purchase incentives (on top of the various labourer cottage purchase schemes dating back to the 1930s).
Could it be that *gasp* the reasons for Ireland’s somewhat average rate of home ownership in European terms are other than innate and biological?
Good analysis, as ever. One more caveat on those figures though. The bulk (not all) of the countries with higher home ownership rates were in what we used to call the Eastern bloc. The overnight privatisation of state assets that occured there nearly 20 years ago now, including the option for people to buy out their homes, must skew the analysis? I’m not arguing against you, I’m just saying that the home ownership trend in those countries was massively non-linear, a step function compared to the exponential function which you’ve clearly illustrated was the case here. I don’t have any facts or figures by the way for home ownership in Eastern Europe, I’m only going by anecdote from friends and work colleagues who are from there.
Oh you’re absolutely right Left. State construction of housing and the buying-out thereafterwards had a significant affect not only in the Eastern Bloc countries but in Ireland as well. The privatisation of local authority housing is one of the factors in Ireland’s current rate of home ownership. The privatisation of state housing also had an affect on British home ownership rates.
The point I’m trying to make is about Irish exceptionalism, that Ireland is somehow exceptional with its home ownership rate. Not only is home ownership high in Britain, Ireland and the former Eastern Bloc countries, it is also high in countries such as Greece, Italy, Spain, Norway, Belgium and Finland.
Now there are reasons for the home ownership rates in the respective countries, but exceptionalism is not one of them, and really I want to show how the media’s use of Irish exceptionalism is to obscure the scam at the heart of the last property bubble - which was never about renting or buying houses, but rather the buying and selling of mortgages and the billions involved in such a trade.
On a related note, I came across a quote there yesterday Left that you might find interesting. It’s from 1932:
“The Free State Minister for Local Government may be faced at a near date with the definite first step in what has been described as the ‘no-ownership’ movement. The movement has arisen out of the Dublin Corporation’s efforts to create house-owners among the working classes, but has been alluded to as ‘motivated from Moscow.’ ” (Irish Times, 29 November 1932)
Just a small thing on the first graph. During the property boom of booms from 2001-2006, home ownership declined and rentals increased. Is this a result of migrant workers or further evidence that speculation was waaaay outta control and that Zombie estates were ecoming apparent years before NAMA?
Very good point John. I noticed that myself and I don’t know at the moment. I need to do more digging. Certainly the large increase in foreign nationals in a relatively short space of time had an effect. and of course houses simply became unaffordable for significant numbers of people.
I should add that the huge oversupply of housing in 2002/2003 was explained away by the ESRI as holiday homes, so it was known that Ireland was building / had built too many houses for its population size even then, but that demand was being taken up through other channels. Bullshit, of course.
Again this goes back to the narrative being peddled by the critics of the current crisis, that there was a “good” tiger up to 2002, and then a “bad” tiger from 2002 to 2008. But as you said John, these structural problems pre-date the NAMA con by ten years.
THe ESRI line on holiday homes does not compute. Hollier homes are owned by someone for their own use, unless the ESRI are claiming that they are available for rental for a few weeks - if that is the case, emply hotel rooms would fall into the same catagory. No, the only concievable explaination is that there was a regime of tax breaks which meant that it was possible to build houses with no market need - ergo the march of the Zombies in little Leitrim and points more obscure, if that’s possible.
There is something eerily, well, Soviet about this, like vast state steel factories in bleakest Siberia churning out crap steel that no one needs. Or this: http://www.answers.com/topic/potemkin-village
Or the story from Kapucinski’s The Emporor, about Heile Selasse’s court having 30 pristine school uniforms whoch were sent in advance of the Emporor’s ’surprise’ visits to rural villages. The deluded Lion of Judah was convinced that each shool child had a perfectly startched uniform and as soon as he departed the uniforms were sent onto the next village.
Or Billy Connolly’s joke about the Queen thinking that the entire country smells of fresh paint.
The problem is that we have nothing left to paint…
Oh I know. John Fitzgerald put his name to a report in the early 2000s where he said that he had found over 100,000 holiday homes. The 2006 census listed just over 49,000.
Just noticed this…a little rewriting of history because David McWilliams or the PR bumf for his “Outsiders” gig claims he was the only economist to predict the collapse of the property bubble:
http://www.tribune.ie/article/2010/may/30/economists-irate-over-mcwilliams-one-man-show/
“John FitzGerald of the ESRI estimates that demand for second homes pushed house prices up by 15% to 20% between 2000 and 2003. The latest census figures show 170,000 Irish houses, almost 12% of the total, were empty in 2002. One in five houses on the Atlantic seaboard stands empty” (Sunday Tribune, 19 June 2005)