The Department of Finance has embarked on a new consultation to assess whether or not there is adequate funding for the development of residential property.
The review comes as the supply of new homes remains weak, with the output for 2021 expected to considerably lag demand, which continues to rise, with mortgage approvals hitting record figures in November.
The consultation is part of an overall assessment by the Department of Finance on the performance of the Home Building Finance Ireland (HBFI), a state backed funder set up to improve the supply of new homes .
Launched in January 2019, as part of Government efforts to tackle the housing crisis by funding home-building projects that the banks were not prepared to back, HBFI expects to fund the development of 7,500 homes over the next five years.More recently it has agreed to lend €74 million to developer Marlet to fund the construction of the 253 apartments planned for Green Acre Grange at Dundrum, south Dublin.
The consultation seeks to assess the adequacy of funding for residential development in Ireland, and respondents are asked to give their thoughts on a number of topics including access to, and adequacy of, finance; the impact of the Covid-19 pandemic on the sector; and the impact of the HBFI and the HBFI application process.
Whether or not the HBFI offers an adequate range of products is also part of the consultation. In addition to its €300 million Momentum fund, which lends to residential developers on risk exposures that are consistent with those offered by the main banks, HBFI currently offers another two products, including a small development product which offers a 50 per cent guarantee provided by the European Investment Fund (EIF), as well as a social housing product.
In the first three months of this year it plans to introduce a green funding product, which will support and encourage sustainable development.
Submissions can be made before February 10th, 2021 via: hbfi@finance.gov.ie
