Affordability weighs on goal of 22,000 new homes
Reaching an interim target of 22,000 new homes this year may be missed because of the pressures of affordability and the fact that too few apartments are under construction, according to a new analysis.
Estimates by Goodbody chief economist Dermot O’Leary suggest that weakness in the market in the second half of last year puts into doubt expectations for 22,000 new homes to be delivered this year, while “the management of affordability, costs, and a significant increase in apartment output will be key to reaching a medium-term target of 35,000 units to meet demand”.
The construction of 35,000 new homes a year is widely seen as the target that would in time help ease the huge pressures in the housing market, including homelessness and sharp rises in prices and rents. Most experts believe the goal is still many years away.
Mr O’Leary said affordability has become a key factor. He estimates that across the State, 18,852 homes were built in the 12 months to the end of March, up 25% from a year earlier.
The Dublin region accounted for 7,107 of the new builds in the period, the mid-east accounted for 4,205, and the south-west for 2,194, according to Goodbody.
By type, 2,675 apartments were built in the period. Missing the 2019 interim target could mean that rents rise by more than 5% this year, said Mr O’Leary. The figures also suggest that the old issue of urban sprawl is re-emerging.
“Given the dominance of jobs within Dublin, this is creating consequential bottlenecks in public transport and the road network. A way to address this problem is clearly investment in public transport but also a full embracing of density in the capital,” he said.
