Sunday 17 December 2017

New-homes market 13,000 short of number needed to ease crisis

New House Builds
New House Builds
Paul Melia

Paul Melia

Work has started on fewer than 3,000 homes to be sold on the open market and help alleviate the housing crisis so far this year - that's 13,000 short of the 16,000 needed in 2015.

Data from the Department of the Environment shows that just 4,671 units are under construction, but 40pc of these - or 1,883 - are one-off homes being built to order and unlikely to be put up for sale.

Although there has been a rise in the number of new homes at the beginning of every month compared with 2014, there is little or no activity in 12 of the 31 local authority areas.

In three counties - Cavan, Leitrim and Offaly - work did not begin on any estate houses. In another nine, fewer than 10 units are under way.

The Housing Agency says that 16,000 homes a year are needed just to keep up with demand. In Dublin alone, almost 38,000 are needed to the end of 2018.

But a lack of bank finance is hampering development, and the figures show that just a fraction of the required properties will come on stream in the near future.

Among the key issues for the Government is allowing developers to access land banks, particularly in the cities.

It is understood that Nama will be told to free up land and take a more active role in house building, even though the State's 'bad bank' is currently delivering 43pc of all new homes in Dublin.

Among the challenges for the Government is that a housing taskforce for Dublin, where demand is highest, says that as much as €165m is needed for infrastructure works - including water services and roads which would allow lands to be developed.

The Government will announce its capital investment plan to the end of 2022 this week, which is expected to include some funding for these works.

But the figures show a lack of activity which is fuelling price hikes - and driving rents way beyond rises in the cost of living.

The data shows:

n Work has begun on some 398 homes, on average, every month this year. This is almost three times the monthly rate for 2014 at 136, but is still well below the required levels.

n The highest number have started in Fingal in north Dublin at 804, which is among the fast-growing areas in the State.

n It is followed by 536 in Kildare, 450 in Dublin city and 199 in Dun Laoghaire-Rathdown.

n Of the 2,788 homes nationally under construction, more than 80pc are in the Greater Dublin Area, which includes Dublin, Meath, Kildare and Wicklow.

n Some 1,606 are in the area covered by the four Dublin local authorities alone.

n There are worrying signs of a slowdown in other areas of high demand - including Cork city, where work started on just 26 homes, of which 16 are one-off.

n In Galway, a total of 170 units are under construction but 142 are one-off.

n In 12 counties, fewer than 10 homes are under construction. They are Cavan, Clare, Kilkenny, Laois, Longford, Monaghan, Offaly, Roscommon, Sligo, Tipperary and Westmeath.

Coalition sources fear that unless house building is ramped up in areas of highest demand, particularly Dublin, prospective house buyers will move to suburban areas and commuter towns which are poorly served by transport links and essential services, including schools.

One source said that among the reasons for the low number of commencements under way was that developers were awaiting a review of the building regulations, which were finalised early this month.

This changed the rules and exempted one-off builders from employing experts to certify that the works were completed in line with the regulations. The changes do not affect developments.

So far this year, just 6,745 homes have been completed - 914 apartments, 2,579 in housing developments and 3,252 one-off units.

Irish Independent

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