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Friday 23 February 2018

€1bn spent on home renovations due to lack of trade-ups

(Stock photo)
(Stock photo)
Paul Melia

Paul Melia

Homeowners have spent more than €1bn upgrading their homes over the last three years as the housing crisis limits their ability to trade up.

The money has been spent on extensions, renovations and energy upgrades, funded by a sharp rise in the number of mortgage top-ups.

There has also been a noticeable increase in the number of extensions in excess of 40sqm getting planning permission.

Some 1.2 million sq m of home extensions have been approved since 2013 - the equivalent of around 12,000 three-bed semi-Ds.

The average size of each extension is also getting larger, and most have been completed in Dublin and Cork - where demand for homes is highest but where supply is low.

Official figures suggest that as many as 30,000 new houses and apartments are needed every year to allow first-time buyers onto the property ladder and families to trade up, but last year just under 15,000 were completed.

The scarce few properties coming on to the market are swiftly snapped up, leading to price inflation of just over 9pc year-on-year.

The Construction Industry Federation said that renovations and extensions accounted for 25pc of total output until the recent return to growth in the sector, and that it played an important role in sustaining the industry during the downturn.

"We think the home renovation incentive (from Revenue) played a huge part in priming the industry. Without it, we would think there would have been far more job losses," a spokesman said.

Figures drawn from Banking and Payments Federation Ireland, the Sustainable Energy Authority of Ireland, Central Statistics Office and Revenue Commissioners suggest that in the absence of supply, homeowners are instead investing in their homes, extending and renovating and making them more energy-efficient. The figures show:

Some 5,860 homeowners have topped up their mortgages by €418m between 2014 and the first quarter of this year;

Extensions and renovations costing €840m have been completed under the Home Renovation Incentive. This includes 7,994 extensions at a cost of €495m;

The Sustainable Energy Authority of Ireland has approved grants to fund energy upgrades costing €207m;

More than 20,000 large house extensions have been approved since 2013.

Irish Independent

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