Cork Minister Housing Coveney comments on house price increases

3 April 2017
By David O’Sullivan
david@TheCork.ie

Minister for Housing Simon Coveney

The Minister for Housing, Planning, Community & Local Government Mr. Simon Coveney, TD, today commented on the latest reports published by Daft.ie and MyHome.ie.

“The report shows that demand is strong, driven by economic growth and increasing numbers of households.

We have created the environment to increase housing supply and to encourage competition among developers. New housing supply at scale is now crucial. We have already made a number of changes to our planning system to speed up planning applications and have reduced development contributions in Dublin & Cork. The Housing Delivery Office in my Department is working closely with local authorities to ensure that any possible bottlenecks are identified and eliminated.

There is no quick fix for supply but all the indicators show that it is responding well to increased demand. Our most recent Activity report indicates that Commencement Notices in the 12 months to January 2017 are up 44% year on year, completions to January 2017 year on year are up 18% and planning permissions to the end of 2016 are up by around 20%. The Help to Buy Scheme which targets first-time buyers is turning notional demand for new homes into actual demand on the ground. Of the 3,005 purchases by first time buyers in Q4 2016, close to 10% of them were for new houses. Furthermore, the growing numbers in employment in the construction industry is further evidence of a confidence and buoyancy in the housing sector. That’s why we need to continue to focus on supply through measures like the Local Infrastructure Housing Activation Fund (LIHAF) to deliver in large volumes where demand is strongest.

Under LIHAF we are investing heavily in critical infrastructure; €226million will be spent on roads, bridges, parks and this will be supplemented by funding from Irish Water for sewerage & water supply and from the National Transport Authority for critical road infrastructure on large strategic sites nationwide.

The public infrastructure being provided to support 34 sites under LIHAF has the potential to deliver almost 23,000 housing units across the country by 2021. There is also further potential for approximately 46,000 additional housing units on these sites in the longer term, bringing the projected yield up to 69,000 homes once they are fully built out.

In the Dublin area, up to 14,000 additional housing units will be provided up to 2021 with a long term potential yield of over 37,000.

In Cork, over 3,000 housing units will be provided up to 2021 with a long term potential yield of almost 10,000 housing units.

In the rest of the country, an additional 6,000 housing units will be provided by 2021 with a long term potential yield of about 22,000 housing units.

There is a strong focus on affordability in the projects being funded under LIHAF. Local authorities were specifically asked to focus on affordability in considering what proposals to put forward and have received commitments from housing developers with regard to affordability. It is expected that local authorities will work quickly to deliver public infrastructure which in turn will ensure that significant housing can be delivered in the period up to 2021. The substantial increase in housing supply should ensure that the house prices are competitive.

In the coming weeks and months, we will publish a list of local authority-owned sites in our major cities and these will be used to encourage private developers to link up with local authorities in joint ventures.

The four Dublin Councils will be bringing large scale sites forward for mixed tenure development in the next few weeks and these sites will deliver 3,000 homes at more affordable prices.

We are also spending €5.5billion on 47,000 additional social houses in the next five years.

If we get a supply response on a sufficient scale, then we do not have to see the price growth levels Daft.ie is predicting. That’s my focus.”

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