Friday 30 September 2016

Real deal

The business of property by Philip Farrell

Published 19/06/2016 | 02:30

Fresh to market this week, quoting €2.75m, is former President Mary Robinson and husband Nick's Mayo home - Massbrook House, a fine Victorian property on 113 acres along the shores of Lough Conn. The couple bought the house in 1994 towards the end of Mary Robinson's presidency. While she still travels frequently in her role as UN Special Envoy for Climate Change, the couple are downsizing from the five- bedroom property with its large grounds. The sale is being handled by Sherry FitzGerald Country Homes and Christies International Real Estate who expect 'strong interest' from abroad
Fresh to market this week, quoting €2.75m, is former President Mary Robinson and husband Nick's Mayo home - Massbrook House, a fine Victorian property on 113 acres along the shores of Lough Conn. The couple bought the house in 1994 towards the end of Mary Robinson's presidency. While she still travels frequently in her role as UN Special Envoy for Climate Change, the couple are downsizing from the five- bedroom property with its large grounds. The sale is being handled by Sherry FitzGerald Country Homes and Christies International Real Estate who expect 'strong interest' from abroad

The announcement this week by ministers Coveney and Donohoe of the €200m Local Infrastructure Housing Fund is a step in the right direction and hopefully the first in a raft of initiatives to deliver the 25,000 new homes required annually in Ireland. Based on figures to hand there will be a total pent-up demand nationally for 50,000 new homes by the end of 2016.

  • Go To

The fund was introduced to address the 'infrastructural deficits' preventing the commencement of many new housing developments. About €150m of the monies will be used to provide bridges, roads and other infrastructure necessary to allow work to begin on these projects. The remaining €50m will be made available through low-cost financing to local authorities through the Housing Agency.

This will help the councils to address the provision of social housing, something which has proven a real challenge to date. Currently, social housing has been delivered via the 10pc planning requirement on all new developments, the purchase of existing houses primarily with Housing Associations and, finally, through the construction of new homes by local authorities themselves.

In Dublin alone, there are currently 50,000 people on the social housing waiting list and the numbers provided have fallen well short of those required.

To put things into context, local authorities built 75 units nationally in 2015 and a further 400 were built by Housing Associations. According to Tom Parlon, CEO of the Construction Industry Federation (CIF), "studies have shown that the actual physical materials and labour involved in housebuilding is only 45pc of the total cost of production".

This new fund should reduce the overall cost of house-building and help produce homes at affordable levels. It also has the potential to free up land that is zoned residential but is not adequately serviced by road access, water infrastructure and other vital local infrastructure. Let's hope it has the desired effect for both public and private housing construction alike.

Industry's big day out

The Institute of Professional Auctioneers and Valuers (IPAV), which represents 1,100 auctioneers and valuers across Ireland, held its annual conference in Dublin last week, managing to mix business and pleasure in generous amounts.

Tanaiste and Minister for Justice and Equality Frances Fitzgerald officially opened the event. Dr Lorcan Sirr, lecturer in Housing at DIT, told the conference that "Ireland hasn't had a housing policy since 2011", and it badly needs one based on the reality of a rapidly changing Ireland.

He highlighted the need for a long-term plan for an affordable housing system based on new employment conditions, new financial rules and new family structures.

Successive governments, he says, have avoided some hard facts: "About 30pc of all households will end up renting for life, and a similar proportion may need help from the State to house themselves. Any plan for housing must therefore be based around these realities."

Other speakers included property commentators Karl Deeter and Frank Quinn, who discussed their co-produced first historical index of Irish house prices over 300 years.

According to Mr Deeter, projecting forward "we will experience a continued low interest environment for some time together with increasing house price growth."

And after all those impressive speakers, a gala dinner rounded off the evening with guest of honour, the rugby legend Paul O'Connell, enthralling 250 attendees with an account of the final days of his career.

Planning for the future

The latest CSO figures for planning permissions granted for the first quarter of 2016 only go to highlight further the need for significant government intervention in our broken housing model. While we are now starting to see a greater number of new homes coming to the market, especially in the Dublin area where the supply issue is most acute, it is important to assess what level of supply is coming down the track.

The number of planning permissions granted for new homes nationally in Q1 2016 fell to 3,091, a fall of 3.8pc from the figure of 3,213 for the first quarter of 2015. Alarming to say the least.

If this pattern was to continue through the remainder of 2016, the crisis will only increase.

Why is this the case?

Figures indicate that there is enough building land in Dublin alone for up to 49,000 housing units. It is clear then that many landowners are still not prepared to proceed to development stage in today's economic environment, which ultimately is determined by prices achievable.

It also comes as no surprise that the number of applications in the regions are down as it simply doesn't make financial sense to build new houses and will not for some time to come.

While the property market has made a recovery over recent years, the CSO's stats only go to prove that the Government has a mountain to climb in the area of housing supply.

  • Philip Farrell is a property expert and market commentator

Sunday Independent

Read More

Promoted articles

Editors Choice

Also in Life