New figures released by Deutsche Bank show that it could take up to 43 years to fill the abundant empty properties around the economically struggling Ireland.
The Irish Independent reports that Deutsche Bank’s data shows that there are 289,451 empty houses in Ireland, including almost 60,000 vacant holiday homes. Those figures put Ireland’s vacancies at a whopping 15 percent, five times the amount of the UK.
Deutsche Bank noted that "Demand for housing is the key factor as to how long it will take for this oversupply to be reduced, and aside from demand for second homes the key driver should be population growth."
In 2011, population in Ireland grew by just 13,000. That, with the average number of residents per house, the Deutsche Bank estimates that it could take until 2055 for the glut of houses to be worked through.
The report compiled by Deutsche Bank indicates that if such a population growth is sustained, it will take 43 years for the unoccupied houses to be filled. That figure does not account for the unoccupied vacation homes, but when are those are factored in the estimated time to fill the houses jumps to 57 years.
"Barring a sudden and sizeable recovery in Irish net migration, or a politically controversial policy of demolishing large volumes of excess housing stock, housing oversupply will remain a feature for many years, possibly decades, to come," says Deutsche.
"This has ramifications for any bank with development loan exposure, and also for the mortgage market, where prices have continued to fall and oversupply makes any reverse of this trend unlikely in the near term.”
"Over 200,000 houses would need to be demolished in order for the housing supply to fall to three years of current population growth."
The new report by Deutsche Bank comes just after Nama announced that it will invest approximately €2bn to complete unfinished commercial and residential properties around the country.
In addition, Nama said that it would invest in creating some greenfield sites "in anticipation of future supply shortages in some market segments". This would create 25,000 jobs in the construction sector, according to Nama chairman Frank Daly.
In April 2010, Nama boss Brendan McDonagh told the Oireachtas Public Accounts Committee that the state agency would consider bulldozing properties in certain circumstances, but that this would not be the "first option".