One in three houses bought as second homes, says ESRI
Almost one third of new houses built this year are second homes bought by existing homeowners, it was claimed today.
A report by an economic think-tank, ESRI, estimates that up to 20,000 of this year’s 70,000 housing completions consisted of second houses to rent to tenants or holiday homes in rural or coastal locations.
This year is expected to be the tenth successive year of record house-building but the Quarterly Economic Commentary cautions that any reduction in 2005 could hit economic growth.
Today’s report acknowledges that public finances are in a “healthy position” but warns that any fall in house-building has “the potential to reduce predicted economic growth prospects substantially”.
ESRI economist David Duffy added: “We will see house-building ease back by about 5% in 2005, which will have a significant impact on the economy moving forward.”
A total of 61,000 houses and apartments were built in Ireland in the first 10 months – up 13% on the same period in 2003.
“Ireland has always had a high proportion of home ownership. It currently stands at 82% compared to an EU average of 60% and a low of 40% in Germany,” Mr Duffy added.
“Whether it’s for property speculation or for personal use, more and more people are acquiring second homes.”
The ESRI report also said jobless figures will average out at 4.4% in 2004, but will drop to 4.3% in 2005.
Official EU statistics recently showed that Ireland has the second lowest unemployment rate in Europe, just a fraction higher than Luxembourg.
“Wage growth is expected to moderate to an average of 4.4% next year, down from 5.5% in 2004 but still well in excess of expected consumer price inflation,” added the ESRI report.
Economic conditions have remained strong throughout 2004, it said, and output growth is expected to average 5.5% for this year and 5% in 2005.
GNP is anticipated to grow by 5.1% in 2004 and 4.6% next year.
