Thursday 25 December 2014

Number of new homes built this year will fall short by 6,000

Published 02/09/2014 | 02:30

FEWER than 10,000 homes will be built this year, far less than the 16,000 needed to meet pent-up demand.

New figures from the Department of the Environment show that less than 4,000 houses and apartments have been completed in the first five months of the year, with major shortages now expected in built-up areas where demand is highest.

And many of the completed homes are unlikely to go to sale on the open market because they are one-off units that were built to order.

Of the 3,941 units completed, almost half (1,917) are individual units. Some 846 apartments and 1,178 houses in developments have been finished.

The lack of units coming on stream comes despite soaring prices in the major urban centres, where only a fraction of the required homes are being delivered.

Prices have risen by 22pc in the capital in the past year and 10pc nationally, and they are expected to continue to soar unless more homes are built.

The rate of new homes coming on stream has plummeted since the height of the boom in 2006 when more than 93,000 units were delivered.

The current rate of completions is the lowest since records began in 1975.

The Housing Agency says that 15,932 units are needed every year until 2018 to cater for an increase in population and to provide options for people hoping to trade up as their families grow,

Based on current completion rates, just 9,500 will be delivered before the year is out.

The statistics from the Department of the Environment also show that little development is happening in the major urban centres.

They show:

Just 1,155 units have been completed in Dublin. Some 5,663 are needed this year alone, according to the Housing Agency.

Just 56 have been completed in Cork City, but almost 270 are needed.

In Galway city, just 21 are finished, with another 21 in Limerick. About 600 a year in each city are required.

The figures come after the ESRI recently warned that new homes were needed in Dublin, Kildare, Meath, Wicklow, Galway, Louth, Cork and Westmeath.

Demand is most pronounced in the Greater Dublin Area, and the ESRI said that unless more homes came on stream it will result in "significant housing shortages".

Builders lobby group the Construction Industry Federation (CIF) said that based on completions so far this year, the final tally for the year would be around 10,000 units - of which just 3,000 would be in housing schemes.

CIF director general Tom Parlon said that a number of barriers to construction needed to be tackled including providing finance for new developments, a reduction in development levies, changes to a requirement to provide affordable housing in new schemes and changes to the VAT regime.

Flexible

"There also needs to be a more flexible approach to planning," he added. "Currently, permissions exist in the greater Dublin region for approximately 21,000 apartments. Other than in the city centre there is no demand for these kinds of homes.

"The CIF has called for a VAT reduction to 9pc on house building. This will help to stimulate the industry, increase the supply of homes and provide employment. Until these issues are tackled in a meaningful way, house completions will remain low and the housing supply shortage will continue."

The Government plans to introduce a range of measures to stimulate construction including reducing development charges, imposing a levy on undeveloped sites in prime city and town centres and reducing the requirement to provide affordable housing in new developments.

In addition, it also proposes reducing the tax rate on the sale of land rezoned for housing to bring sites into use.

Irish Independent

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