Empty properties expected to almost double in 2014

The Guardian reports: Ireland's bailout may be over but its housing crisis is far from finished


The Guardian reports:

Henry McDonald
23 February 2014

Ireland may have left the international bailout programme but its problems are far from over, with the number of empty properties left over from the crash likely to almost double in 2014, according to rating agencies and campaigners for distressed mortgage holders.

There are now 14,000 empty houses and flats scattered across the Irish Republic, including 700 so-called "ghost estates".

Most of the abandoned properties now belong to the state company, the National Assets Management Agency (Nama), and 4,000 are earmarked to be handed over for public housing. But projections suggest repossessions will accelerate this year and David Hall, founder of the homeowners' campaign group the Irish Mortgage Holders Organisation, said this meant the rate of empty properties would have increased to more than 26,000 by the end of 2014.

Almost a fifth of mortgage holders are in arrears in Ireland – the majority more than three months behind their payments. In its latest analysis of the Irish property market at the start of 2014, the ratings agency Fitch said one in five houses where mortgages had been in arrears for three months or more was likely to be repossessed.

Hall described the thousands of empty properties as a "disgraceful vision", given that levels of homelessness are on the rise in Ireland again. He said: "The existence of the 'ghost estates' and the empty flats, houses, apartment complexes proves that the state put the banks ahead of the interests of its citizens."

He said social housebuilding was still at a low point in the state, yet there were more than 90,000 people on housing waiting lists across Ireland. Commenting on Nama's plan to hand over 4,000 of the empty properties to local authorities, Hall pointed out that in County Kildare alone there were 5,000 people on the waiting list.

"This measure to hand over these properties does nothing to solve the huge numbers of people living in private rented accommodation, including B&Bs," he said. "It suits the banks to have a dearth in supply of homes, because in places like Dublin property prices are artificially on the rise again. Demand is high but supply is limited. Banks are basically using a financial Ouija board to try to conjure up a magical property price hike across the country. The banks are still being allowed to dictate what happens to these properties," he said.

Fitch's projections would mean more families left homeless and ultimately more taxpayers' money being used to pay for their rents in the private sector, he said.

The Priory Hall apartments complex in north Dublin stands empty and desolate, and as a monumental reminder of the greed of the Celtic Tiger years. In October 2011, 256 residents were evacuated after Dublin city council discovered major fire hazards in the building. The residents were originally rehoused in hotels and B&Bs, and have since lost hundreds of thousands of euros in deposits on apartments they first moved into in 2006 – the last major growth year of the Celtic Tiger.

The taoiseach, Enda Kenny, finally stepped in to help the homeowners after one of them, Fiachra Daly, took his own life after being weighed down with the debt left behind by the closure of the flats. Kenny had ordered that public money be used to write off the Priory Hall residents' mortgage debts to banks and building societies. On average, the mortgage for the flats was about €260,000 (£215,000).

The state has also set aside €10m to refurbish the building but Graham Usher, who bought a flat in Priory Hall back in 2006, said he would never return.

"It's just too much for most of us," he said. "There was too much heartache and stress associated with that place for me to ever go back there. Even when I pass by it now the whole place brings back too many memories. It is situated in a good area and I wish anyone who moves back in in the future the best of luck. But for me, I want to put the place behind me and move. It represents everything that was wrong about the Celtic Tiger years – the greedy builder, the shoddy construction and all the excesses of those times."

Those who work with Ireland's growing number of homeless people say that with rents increasing in areas such as Greater Dublin by 11% this year, far more of those empty properties should be placed in public ownership.

Bob Jordan, of the housing charity Threshold, said: "We would argue that all of those properties – not just the 4,000 they say are going to hand over to local authorities – should be put into public ownership. The authorities need to bring these on stream now because the homeless crisis is already upon us."