Latest news with #homecompletions
Irish Times
08-07-2025
- Business
- Irish Times
Central Bank ‘surprised' by lack of progress in building homes
The Central Bank has been 'surprised on the downside' by the number of home completions since early last year, and the construction industry will need to increase its workforce by about 30 per cent to hit targets unless productivity improves, the regulator has said. Just 30,330 homes were completed during 2024, while the Programme for Government pledges to deliver more than 300,000 by the end of 2030. There were 5,938 new dwelling completions in the first quarter of this year, which was a rise of 2 per cent on the same three months of 2024, but still low in the context of this year's target of 41,000. Officials from the Central Bank were before the Oireachtas committee on budgetary oversight on Tuesday for scrutiny on its latest quarterly bulletin. The regulator recently revised down the number of homes it expects to be built this year to about 32,500. READ MORE 'That is mainly because of the actual data we've seen,' Vasileios Madouros, deputy governor, monetary and financial stability, told the committee. 'We've been surprised on the downside in terms of completions in 2024 and also the first quarter of 2025.' Mr Madouros said that if current levels of productivity are not improved, the number of people employed in construction will need to grow by 30 per cent to hit Government targets. [ Developers with permission for 57,000 apartments will not need fresh application to change plans in line with new standards Opens in new window ] 'Construction employment at the moment is around 180,000 people, which is a little bit above 6 per cent of total employment,' he said. 'If current levels of productivity were to remain as they are, to meet the new higher housing needs ... we estimate we would need an increase in construction sector employment of about 30 per cent, which is substantial. 'That in itself could be difficult to achieve. We have seen some reallocation of labour within the construction sector to housing. There is probably limited scope to see much more of this reallocation going forward, which is why productivity is so important.' How the wealthy are buying up land to avoid inheritance tax Listen | 22:03 Martin O'Brien, head of the Central Bank's Irish economic analysis division, said Ireland is about 20 per cent below European averages in terms of productivity. 'If we just got to European average levels of productivity in construction, we would get 20 per cent more output for the same level of labour input,' he pointed out. 'There are a number of factors that contribute to that, [such as] greater adaptation of modern methods of construction. 'Construction firms in Ireland also tend to be very small, and it's very hard for small firms generally to innovate and engage in adapting to more modern methods of technology.' He said 'anything that can be done' to incentivise firms to invest in the necessary technology and skills they need to be more productive 'would certainly help us to reach the kind of levels of housing supply that is necessary'.
Irish Times
14-06-2025
- Business
- Irish Times
Rent reforms will pull up the drawbridge on future renters
The Government came to power with an urgent mandate to resolve the housing crisis . It's had an inauspicious start. There were fewer than 6,000 new home completions in the first three months of the year, according to Department of Housing figures published last month. While that's up 2 per cent on the year, it leaves a mountain to climb for the Government to hit its target of growing output by more than a third to 41,000 this year – and ratcheting up incrementally to 60,000 in 2030. Recent developments suggest this administration is as short-sighted and flighty as every other in recent times when it comes to housing. Take the plan to set up a housing activation office – one of the better ideas to come from the Department of Housing of late – aimed at getting a crack team of officials to move quickly on addressing barriers to the delivery of critical infrastructure to boost housing development. READ MORE [ John McManus: Government had to choose tenants over investors Opens in new window ] Minister for Housing James Browne's planned appointment of National Asset Management Agency (Nama) chief executive Brendan McDonagh as housing tsar descended into political farce when the Government baulked at Opposition criticism that he would retain his Nama salary of some €430,000. McDonagh, a very credible figure whose bond to public service isn't questioned even by his sharpest critics, had little option but to pull his name on May 1st when Tánaiste Simon Harris let it be known that he was peeved about not being kept in the loop. Appearing on The Late Late Show the following evening, Harris told middle Ireland that he did not think such a salary was a fair one. An effective housing tsar would be worth multiples of the controversial figure. Either way, McDonagh remains an employee of the State on that package. He's due to return to the National Treasury Management Agency (NTMA) once Nama – to which he is seconded – is wound down at the end of this year. Further evidence of political expedience remaining the order of the day is to be found, too, in the fresh stab this week at rent reforms. Currently, rent increases in rent pressure zones (RPZ), which covers about half the land area of the State, cannot be greater than the rate of inflation or 2 per cent – whichever is lower. A planned new nationwide control system – set to fully kick in from March 2026 – would also see rent increases for tenancies capped in most cases by inflation or a maximum cap of 2 per cent. However, landlords would be able to reset rents at the going market rate when a tenant leaves. Smaller landlords with three or fewer units will have to offer rolling six-year tenancies, while large ones will not be able to evict a tenant who has complied with their obligations except in very limited circumstances. [ Rent changes: How will tenants be impacted by the plans for Ireland's rental market? Opens in new window ] Rent control for new apartments constructed following enactment of the legislation would be linked to inflation. This, the Government said, should 'provide certainty, clarity, and encourage investment'. If only. There's a body of academic studies that point to rent controls in general affecting construction. Konstantin Kholodilin, a senior researcher with the German Institute for Economic Research in Berlin, last year reviewed 122 empirical published studies on rent controls internationally, spanning 1967-2023. Two-thirds of those studies that assessed the impact of rent caps on new residential development found they depressed construction, he said. Irish private-rental-sector construction was booming during the phase of RPZ rent controls between 2016 and mid-2021. But that was at a time when increases were limited to 4 per cent and interest rates globally were at ultra-low levels. Since then we have seen the maximum rent cap cut by half, construction costs spiral, and global interest rates spike (though they have since come off their highs). Construction in the private rental sector has all but evaporated. Although Approved Housing Bodies and the Land Development Agency have stepped in to address part of the gap in apartment building, they are focused on social and affordable accommodation. Construction and finance industry figures say uncertainty caused by ever-shifting housing policy is more off-putting for investors than individual tweaks in themselves. With the latest rules delayed until next March, can investors willing to consider new schemes even commit before then? Add in at least another three years before any new supply comes on stream, and you're talking about the end of the decade at the earliest for those brave enough to deliver. There is nothing in the plan that would curtail an ongoing trend of small landlords exiting the market, further tightening supply. Sherry FitzGerald, the largest estate agent in the country, estimates that landlords fleeing the rental market accounted for 30 per cent of all home sales in the first quarter of the year. Allowing owners new builds to link rents to inflation – a volatile index – compounds uncertainty for investors. Consumer price inflation is running at 1.7 per cent. The incoming measures may serve existing tenants well, but effectively pull up the drawbridge on future renters. People are likely to stay put for longer. This, along with a dearth of new builds, will further depress available stock and – all else being equal – push up what are already some the highest open market rental costs in Europe.
Irish Times
27-05-2025
- Business
- Irish Times
The Irish Times view on the latest moves on housing: recognise there are no quick fixes
It comes as no surprise that the Economic and Social Research Institute is predicting that the number of home completions this year will rise only modestly to 34,000, from just over 30,300 last year. The Minister for Housing, James Browne, was forced to concede yesterday that reaching the target of 41,000 for this year would be very challenging. And to meet the Government target of 303,000 houses between 2025 and 2030, further sharp increases would be needed in subsequent years. The Government will be all too aware of the 'Groundhog Day' nature of the housing debate , with targets consistently being missed. The Opposition parties are trying to take advantage by organising a day of protest next month – it remains to be seen what proposals they will put forward. The Government is exposed here because of the failure of the previous administration and the denial of reality in the general election campaign, when outgoing ministers insisted that close to 40,000 homes would be built last year. In addressing all this, the Government needs to accept that there are no quick fixes. Tinkering around with policy is at best pointless and at worst counter-productive. Longer-term solutions are the ones that count and the Government needs to get on with these if it is to see any meaningful results during its term. READ MORE In this context, the move by the housing minister to extend the terms for which planning permissions apply in some cases seems sensible. At the moment developers can 'time out' if hit with lengthy judicial review proceedings and have to reapply. Offering planning permissions extensions in some cases should help in terms of encouraging development and could be particularly helpful for apartment projects. It will provide some more certainty in the process. Opposition complaints that it will encourage land hoarding need to be taken into account. The Residential Zoned Land Tax, due to encourage landowners to develop housing on land zoned for this purpose, is finally being introduced, even if it may need to be better focused to achieve the desired result. Both carrot and stick, in other words, are needed. Penalties, as well as incentives, need to be kept under review. There are other problems in planning and viability which also need to be addressed, as well as the contentious issue of rent pressure zones. In tackling these, the Government needs to continue to build certainty for developers, as well as protecting renters and giving hope to potential buyers. It is not an easy balance to strike. State intervention, through a host of routes, is already enormous, but if the core issues of planning, utility provision and viability are not solved, then spending will not achieve the desired results. The Government will not want to go back to basics, but really it has no choice.
Irish Times
20-05-2025
- Business
- Irish Times
Home completions must ‘accelerate significantly' if housing targets are to be met, department warns
The number of homes being completed will have to rise substantially for the remainder of the year if the Government is to have any hope of meeting its annual target of 41,000 units, the latest housing update has warned. It also cautioned that a fall-off last year in planning permissions presented a possible medium-term risk for housing output. There were 5,938 new home completions in the first three months of the year, a rise of 2 per cent on the same period in 2024, the Department of Housing's monthly housing update said. While there has been a slight rise, the department's assessment was that home completions for the first three months of the year were broadly in line with the same period last year. In all, 30,330 dwellings were completed during 2024. This annual figure represented a 6.7 per cent decrease on 2023 and was well short of the target of 40,000. READ MORE 'Home completions ... will have to accelerate significantly through the year to move toward the target of 41,000 units for 2025,' the department said in its latest assessment. Looking at the 12 months ending on March 31st this year, the update noted there was a 4.2 per cent drop in home completions in comparison to the previous 12-month period. The biggest factor behind this was a substantial reduction in the number of apartments completed. There were 8,920 finished, a 17 per cent year-on-year decrease. The fall-off in apartment building was also reflected in planning permissions for the final three months of last year. There had been more than 6,000 in the last three months of 2023 compared to 2,922 in the same period in 2024. 'A large fall-off in applications for apartments dragged annual aggregate figures lower, reflecting ongoing regulatory and viability challenges for the private rented sector. It is important that the Government continues to address these obstacles in the short-term,' the update report stated. However, the assessment does identify some potentially positive trends. It notes a substantial increase in commencement notices registered in April last year in response to deadlines for state incentives to accelerate supply through waivers and rebates. 'Projects associated with the surge in commencement notices in April 2024 should become apparent in completions data from Q2 [April to June] this year, if the timing from commencement notice to completion is consistent with the historic lag between the series,' the report stated. The update put annual property price inflation at 8 per cent in February. In Dublin, the median price for a home was €475,000, a rise of 6.7 per cent in a year. There was also an increase of more than 10 per cent in the number of new mortgages being drawn down, with 9,190 in total, almost 60 per cent of which went to first-time buyers. The wholesale price of construction was up 1 per cent in March compared to the same time a year ago.
