647,000 – it’s a number to remember.
It’s a number that could come to haunt every person in this country during 2008.
Remember 647,000 when you read stories like this one that appeared in the Irish Times on Thursday, 20th December.
Bank of Ireland chief economist Dr Dan McLaughlin said there were signs of untapped demand in the market. In the bank’s quarterly Irish Property Review published this afternoon, Dr McLaughlin said buyers appeared to be holding off because of concerns for the economy and the cost of homes. Dr McLaughlin said: “Affordability looks set to improve for the average borrower; incomes will rise and the rate cycle appears to have peaked.” Commenting on projections in the review which shows mortgage lending likely to drop by around €5.5 billion to €34.5 billion, Dr McLaughlin said the building sector had responded promptly completing 10,000 fewer units this year compared to last. He estimated there would be 20,000 fewer homes built next year – 30,000 off the record 88,000 completions in 2006.
So Dr McLaughlin reckons that during 2008 there will be approaching 60,000 new houses built in Ireland; 60,000 to add to the 200,000 that are currently unoccupied.
Digging deep into Saturday’s Financial Times last night, when the rest of the world was partying, on page 32 the ‘Global Overview’ stated “New home sales tumbled 9 per cent in November to an annual rate of 647,000 – the slowest pace for 12 years. Analysts had expected an annual rate of 720,000.”
Where had new home sales tumbled to 647,000? The United States – a country with a population of 301 million, seventy-five times that of Ireland. Dr MacLaughlin reckons that a country of four million people, in a falling market, is going to build one-eleventh of the number of the houses built in the United States over the past twelve months – the numbers don’t add up.
The end of the building boom in Ireland spells changed circumstances, for everyone, because without it there is little to fall back on. The sharp rise of the Euro against the US Dollar has priced us out of the market for most other things.
When numbers don’t add up the statisticians might scratch their heads and the politicians, in a country where the Taoiseach is paid more than the US President or the British Prime Minister, will engage in their ritual hand-wringing, but it will be the ordinary people who suffer.
Where are the moral theologians, who will adjudicate on every matter of personal sexuality, when it comes to families struggling with negative equity; when it comes to marriage and home life under strain because of pressure to work more and more to try to pay the bills; when people lose their homes because they were sold a lie?
What would the bishops say about it if our building levels fell to US levels?