Agent View: In search of a solution to the new homes problem
The term 'the new homes market' is a phrase that sums up the uncomplicated nature of newly built residential property, comprising houses and apartments being built for sale purposes. However, where it becomes complicated is in the range and requirements of people needing such accommodation.
The demand side of the equation includes single people, couples, the young and not-so- young, growing families, retirees, investors, those that can afford to buy a home and those that cannot and, yes, the homeless. All these categories of people deserve to be looked after in the type of accommodation they require and also in the means to acquire it. This is not currently happening and as a result we have a deteriorating, dysfunctional market.
At present, the only people who can acquire a home are those with cash or the ability to obtain a mortgage by having substantial savings. Therefore, the vast bulk of people needing accommodation cannot obtain it because they are not in these two categories.
The State has an obligation to provide the conditions in which there is a sufficient supply of suitable residential properties to house all people needing accommodation irrespective of their financial capabilities. Currently, this is not happening. Numerous solutions have been put forward but there is little sign on the ground of real emergency action to deal with the problem. Dublin is the most seriously affected by the years of inaction and the current paralysis.
A centrally co-ordinated emergency programme is needed immediately to stimulate the building of houses and apartments in appropriate locations for both the sale and rental markets, including measures to facilitate the reduction of building costs to make it viable again to build residential accommodation, as well as measures to enable all categories of people to access accommodation. The State must accelerate the building of residential units for the homeless and those unable to access the funds to purchase their own home. Moving this obligation on to the building industry is not a solution and is counter-productive as it pushes up the cost of homes for private buyers.
A positive attitude about the role of investors is required by the Government if their funds are to be utilised to help solve the housing shortage. A more favourable tax regime is vital if this is to be achieved. A major programme of residential construction projects would be far more effective in moderating rental levels than any negative rent control measures, which historically depress supply and increase rents.
Ken MacDonald is managing director of Hooke & MacDonald