The next generation of home hunters may have to resign themselves to a life of renting unless planning rules are overhauled, the chief executive of home builder Glenveagh Properties has warned.
Stephen Garvey claimed in an interview with the Irish Independent that unless the changes are made, home ownership will become “more difficult” and people will increasingly have to rely on living in apartments.
Stock market-listed Glenveagh, with a market capitalisation of €1.1bn, built 1,150 homes last year and primarily targets more affordable homes for first-time buyers.
Mr Garvey said current density requirements mean that Glenveagh and other developers typically have to complete schemes with half the units being houses and half being apartments.
“The demand for apartments is only from one customer – that’s institutions. There’s no private demand out there,” he said.
“Half of everything we produce now must be apartments. If we [the country as a whole] are producing 35,000 units a year, less than 17,500 will be own-door, single-family units.”
He said that accounting for about 5,000 one-off housing units built around the country every year bgly individuals, that leaves just 12,000 houses available for sale.
“So, first-time buyers, and downsizers to a degree, only have a pool of 12,000,” he said.
“It means home ownership is going to become more difficult and more reliance on apartment living is going to be the need.
“If the customer hasn’t got the ability to buy the apartment, well then a large element of the next generation are going to have to live in rental stock.”
He said changes to density requirements are required to help change what he says is the current trajectory that could lead to that situation.
But he insisted the country’s housing market can still reach equilibrium.
“But the policies need to be there for us to do it,” he said.
“If the policies are there and every effort is made, absolutely. In fairness, there are a lot of policies that have been introduced, but there’s a lot more that needs to be done.”
“I’m 25 years in this industry. If I had three PhDs, I couldn’t understand our planning system at this stage. It’s become that convoluted.
“Some of this needs to be examined - who put these policies in place, what were they designed for and exactly what are they delivering for the sector?”
Last year Glenveagh delivered the country’s first so-called cost rental scheme under a government initiative – a programme Mr Garvey said “works really, really well”.
The company currently has a land bank that could deliver almost 17,000 homes.
“Everyone goes on about affordability,” Mr Garvey said.
“Do the people who are designing these policies actually understand affordability, do they understand the dynamics of a working-class family and what they need to pay, do they understand any of that?”
He said increasing supply is the most essential part of stabilising Ireland’s residential property market.
“But it’s about the right supply – looking at those policies that we can change to make us able to supply more affordable product,” he said.
“Our consumer is paying €2,000 a month [in rent], but can’t get access to a mortgage for €1,000 a month. How is that fair?”