Only 2,000 new homes will be built in the Dublin area this year despite the urgent need for housing in the capital, Construction Industry Federation chairman Tom Parlon has said. Mr Parlon was responding to an Economic and Social Research Institute (ESRI) report that says 54,000 new homes need to be built in Dublin over the next seven years.
The capital is facing a significant housing shortage if the rate of construction is not “increased rapidly”, the ESRI has said.
Mr Parlon claimed developers’ inability to raise finance was the “single biggest impediment” to restarting the construction industry. “The construction of 25,000 houses would provide 70,000 jobs and generate €6.5 billion, 40 per cent of which would go to the exchequer. House prices are rising, rents are rising and homelessness is increasing. Building houses is a no-brainer, but if builders don’t have access to capital, it can’t be done.”
Few builders have cash on hand and any banks willing to lend are reportedly only willing to put up a maximum of 60 per cent of the capital needed. “Forty per cent of the equity needs to come from another source,” he said.
The Government committed itself several months ago to the creation of a strategic investment fund of €6.8 billion to kick start construction, but had not enacted the necessary legislation to make the money available, Mr Parlon said.
“The legislation was to go through before the end of the last Dáil term, but it never appeared. Builders could be out there working now to solve the housing crisis, but they can’t build houses out of thin air.” He said he hoped the Government would make the legislation its top priority in the new term.
The ESRI report said an average of 12,500 new homes needed to be built yearly, but the housing requirement was not distributed evenly across the State and was largely concentrated in Dublin and its surrounding counties.
More than 60 per cent of the total properties needed were in Dublin, or almost 8,000 units a year, with a further 26 per cent accounted for by demand in Louth, Meath, Kildare and Wicklow.
However, only 1,360 houses and apartments were built in Dublin last year, and Mr Parlon said just 2,000 would be completed by the end of this year. “More will come on stream next year, but we are still far away from what the ESRI and all other reports have said we need.”
The Housing Agency, the Government's advisory body on housing, has said a minimum of 79,660 homes are required in urban areas over the next five years.
“Our research is based on where the population will require housing in urban centres as opposed to a county-wide level as the ESRI have done,” said John O’Connor, agency chief executive said.
“The ESRI research focuses on the entire county and offsets demand in Cork City against vacancy rates in Bantry. This does not provide a clear picture of the housing need for Cork city.”
The Housing Agency report forecasts that 47 per cent of the total supply (37,581) is required in the Dublin region. Cork city and suburbs will see a yearly demand rising to 1,469 units by 2018.
In Galway and Limerick, both cities will experience a shortfall in housing requirements in 2015, but will require 2,316 and 2,635 units respectively over the subsequent years to 2018.
