Developers will make a profit on State-subsidised apartments, minister confirms

The housing minister has confirmed that developers will make a profit on apartments that they build with State subsidies.

Developers will be able to get up to €144,000 per apartment that they build under the newly established Crói Cónaithe (Cities) Fund.

The fund is aimed at building 5,000 apartments across the five major cities.

The Society of Chartered Surveyors Ireland (SCSI) has said previously that developers usually aim for a profit margin of 15pc on their projects.

Social Democrat housing spokesperson Cian O’Callaghan asked housing Minister Darragh O’Brien if developers will make a profit of 15pc on their developments.

“The margin is included, of course, you can’t develop anything without a margin,” said Minister O’Brien.

Mr O’Brien said that there is a need for “radical measures” to get families living in cities.

“What we need to see our cities if we’re serious about compact urban growth if we’re serious about brownfield built again, and if we’re serious about tackling viability issue, and people actually being own apartments, families being able to live in our cities, we need to take radical measures to be able to do that.”

However, he refused to say if the profit margin will be 15pc.

He said that the fund will be targeted and open book for developers and that the subvention will be passed to the purchaser.

The Social Democrats will call for subsidies for developers to be scrapped altogether in the Dáil next week.

Opposition politicians have strongly criticised the scheme, with Sinn Féin calling it “crazy”.

However, the Government is concerned that without the fund, apartments will not get built at all and hope that the money will be an incentive to developers to build apartments.

While developers will receive a maximum of €120,000 per apartment for flats built in Dublin, they may get up to €144,000 for apartments outside of the capital.