Expect most activity in these areas to remain at the luxury end or to be single-lot private rented sector sales or student accommodation schemes.
The new Land Development Agency announced last September promises to free up 30 land banks around the capital for delivery of 150,000 new homes over 20 years. But the first units won’t be built until 2020, and the fact that they will be delivered in most cases by private sector developers raises little hope that these will be truly affordable city centre homes for buyers.
The Banking & Payments Federation Ireland’s most recent Housing Market Monitor for the third quarter of 2018 showed a widening of the price inflation gap between Dublin and the rest of Ireland.
This is reflected in a clear rise in first-time buyer activity and demand in the more affordable commuter counties of Kildare, Wicklow, Meath and Louth. And there has also been a marked increase in new homes activity in the regions, in particular in Cork, Limerick and Galway.
Agents are citing a definite surge in interest as first-time buyers rush to avail of the Help to Buy scheme before the window to apply shuts in December. There has been much speculation the scheme will be extended, but Minister for Finance Paschal Donohoe has made it clear any decision to grant an extension will only be made in Budget 2020 next October.
Meanwhile, developers and builders are hoping to make hay in the starter homes market, where these buyers stand to gain most from the initiative. The launch of a €750 million State loans scheme is likely to provide a shot in the arm to small- and medium-sized developers who until now could not raise funding from banks or other lenders due to prohibitive interest rates and terms. It is expected more than 7,500 new homes will be built over the next five years on foot of the scheme.
Once approved, these developments (which range in size between 10 and 200 homes) should hit the ground running, as a developer will need to have already secured or submitted planning permission for a project.
Concerns have been raised by the Society of Chartered Surveyors Ireland that the scheme will not apply to the building of new apartments where its research anticipates there will be greatest demand next year for one- and two-bed apartments. Instead the funding model is more likely to apply to homes costing €200,000 to build, typically three-bed semis outside of Dublin.
The new homes sector is into recovery mode and fast-track planning will hopefully accelerate delivery. The greatest concern is that adequate provision will be made to ensure the units coming on stream are affordable and located in well serviced areas to meet the needs of young families and buyers, and not skewed towards the needs of big business.
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