The housing landscape of 2024 and 2025 is painted with ominous strokes, as Kevin James, the president of the Society of Chartered Surveyors in Ireland, foresees a grave shortfall in housing. While the current conditions seem to align with expectations, James raises concerns about the future. He believes that although ongoing projects may meet government targets for the following year, the absence of many initiatives commenced this year, which would take substantial time to complete, will lead to a severe housing shortage that threatens the government’s ambitious “Housing for All” initiative.
During his appearance on RTÉ’s News at One, Mr. James illuminated the situation by referring to the Tender Price Index, which indicated a disconcerting 14% surge in tender price inflation. Contrary to expectations, prices did not decline as much as anticipated. The private sector’s willingness to undertake residential developments has waned, with certain investors leaving the market and intensified competition.
According to Mr. James, there is a unique opportunity for the government to assume a leadership role and employ creative thinking, particularly concerning VAT, to incentivize and make housing projects more affordable.
Expressing confidence in the government’s ability to adapt to industry changes, Taoiseach Micheál Martin stated during a speech in Longford that the Minister for Housing would propose an amendment to the Oireachtas to facilitate emergency planning for swift construction of social housing. To compensate for any slowdown in private construction, the emphasis will shift to building these properties on publicly owned land.
Acknowledging the potential challenges in fulfilling future housing commitments, Minister for Housing Darragh O’Brien remains resolute in exceeding expectations. While he does not plan to alter the concrete charge, he is exploring alternative cost-saving measures. The government aims to surpass the target of 24,600 additional dwellings set for 2022, with a robust pipeline of projects initiated for 2023.
Various voices from opposition parties also weigh in on the housing crisis. Sinn Féin’s housing spokeswoman, Eoin Broin, urges the government to adopt a counter-cyclical approach to increase the pace of home construction. Broin emphasizes the need for prioritizing the construction of public houses and providing financing through entities like Home Building Finance Ireland for small and medium-sized builder developers facing difficulties.
Similarly, Cian O’Callaghan, housing spokesman for the Social Democrats, criticizes the government for relying heavily on a single approach to address the housing issue. He highlights the Society of Chartered Surveyors of Ireland’s serious forecast, pointing to a decline in building activity alongside escalating homelessness, rents, and property prices.
Confirming the decline in building commencements, Conor O’Connell, Director of Housing, Planning, and Development Services at CIF, cites extraordinary factors such as skyrocketing material costs, supply shortages, and rising interest rates impacting development finance. While O’Connell predicts that the housing goal for 2022 will be exceeded, he expresses concern over the figures for the following year.
Amidst the challenges, the government has launched several initiatives at their early stages, including the First Home (Shared Equity) Scheme, the cost rental Project Tosaigh with the Land Development Agency, and Cro Cónaithe, a program aimed at repurposing vacant buildings. However, O’Connell highlights the viability and affordability challenge in aligning individuals’ financial capabilities with construction costs. He calls for a comprehensive examination of all measures and upcoming levies that affect building costs, including a regulatory impact assessment for the concrete levy.
As the future of housing hangs in the balance, it is clear that concerted efforts and innovative solutions are required to overcome the pressing deficit and ensure a brighter tomorrow for all.