Ireland's housing market set for dramatic transformation
residential development in Ireland is set to be transformed by the combination of new financial measures and changes to the planning system, says the latest ViewPoint report from agents CBRE.
While Finance Minister Paschal Donohoe's decision to increase the rate of stamp duty on commercial property transactions from 2pc to 6pc in the Budget is the most easily understood in terms of its immediate impact on the housing sector, CBRE expects actions by his Cabinet colleague, Housing Minister Eoghan Murphy, to deliver positive changes to the market.
The removal of the requirement for car parking and the lifting of numerical height caps for certain developments along key tranpsort nodes in Ireland's main cities, and the establishment of a specific planning policy position for Luas, Dart, QBC and suburban rail corridors, are just some of the measures welcomed in CBRE's report.
The introduction of new shared and build-to-rent (BTR) accommodation models to cater for the housing needs of professionals is also highlighted as a positive.
While Ireland's housing challenge is already a significant one, the situation is set to become ever more acute as the population continues to grow.
With the delivery of housing failing to keep pace with the growth in population and demand, house prices have once again begun to spiral to the point at which the average house in Dublin costs €353,975, and €240,093 nationally - according to property website Daft.ie.
Though Ireland has been traditionally associated with high levels of home ownership, CBRE notes that the proportion of renters is growing. In 2016 there were 497,111 households renting, up 4.7pc from 2011, bringing the proportion of renters to nearly 30pc of the population.
CBRE has also analysed the nature of occupancy in Ireland by age group.
This shows that younger sections of the population have a higher propensity to rent, with around 65pc of the Dublin population aged 25-39 renting from a landlord. Only 26pc of people within the same age segment own their home, with the remainder renting from a local authority.
Over half of the 40-54 age group own their home, while up to 85pc of those aged 55 and over are homeowners.
The report concludes that the residential property sector is at a pivotal stage in Ireland, with housing demands growing at a rapid rate due to changing demographics and evolving living preferences.
But CBRE notes that demand varies by age group, as the various stages of life require different housing needs.
Wesley Rothwell, executive director at CBRE Ireland's development land & consultancy department, contends that build-to-rent schemes could be key to meeting our housing requirements, now and in the future.
He said: "Large build-to-rent schemes would not only satisfy investor appetite for scale, but also fill the void in rental stock amid a growing population of students, young singles and couples without children."
While the build-to-rent sector is only in its nascent stage in Ireland, US real estate giant Hines has signalled its intention to use it as a model to deliver homes in volume and at speed at Cherrywood in south Dublin.
Last month, the company included plans for 1,269 BTR apartments in its planning application to Dun Laoghaire Rathdown County Council for the development of the town centre element of Cherrywood scheme.