Friday 20 September 2019

Developers 'build for students and co-living over family homes'

  

Taoiseach Leo Varadkar
Taoiseach Leo Varadkar
Gareth Morgan

Gareth Morgan

Developers are increasingly pursuing student accommodation or co-living developments at the expense of family homes, experts have warned.

Schemes that targeted first-time buyers are slowing amid tight restrictions on mortgage lending but are increasing rapidly when it comes to apartment builds.

New Central Statistics Office (CSO) data released yesterday showed that there were 4,920 new dwelling completions in the second quarter of this year.

This compares with 4,400 completions for the same period during 2018 - or an increase of 11.8pc - as the housing crisis remains a stubborn problem for the Government.

Overall, during the first six months of this year there were 9,185 new dwelling completions, up 16.8pc on the same period of 2018, when there were 7,867 completions.

But while single houses and schemes rose slightly, the biggest surge was in apartments, according to the CSO data.

There was a 55.6pc rise in the number of apartments completed in the second quarter this year, up from 487 to 758.

However, single houses and housing schemes still form a major chunk of market activity - of all new completions in the quarter, schemes made up 57.6pc.

Over three-quarters of all new dwelling completions are in urban areas, many in the Dublin region.

But the single Eircode area with the most new dwelling completions was W91 Naas, followed by A85 Dunshaughlin and V94 Limerick.

Analysts said that the data showed "a market in flux". Even as more houses are built, many first-time buyers struggle to save a deposit amid tight lending rules.

David Grin, chairperson of Lotus Investment Group, said: "Growth in completions has slowed in schemes which traditionally target first-time buyers but increased rapidly in apartments.

"This may be down to the fact that the market is going through some degree of flux at the minute, reacting to concerns over developers' ability to deliver homes priced within Central Bank lending rules for medium-income earners.

"This is driving developers to consider switching to student accommodation or co-living developments, or to look at other build-to-rent schemes."

Taoiseach Leo Varadkar recently called on the Central Bank to loosen strict mortgage-lending rules to help young couples caught in the so-called 'rent trap'.

Lending limits were introduced by the Central Bank in 2015 and are mandatory for all mortgage lenders. Banks are limited to lending three-and-a-half times a buyer's income.

First-time buyers have to come up with a deposit that represents 10pc of the property's value, where other buyers must have a 20pc deposit.

Irish Independent

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