Property
Ireland: 35,000 social housing units by 2020 achievable; Rental market possibly not
By Michael Hennigan, Finfacts founder and editor
Nov 27, 2014 - 1:09 AM

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Ireland: Alan Kelly, environment minister, on Wednesday announced a new social housing programme which aims to accommodate everyone (90,000 households) on the Housing Waiting Lists by 2020. 35,000 housing units are to be built or leased while 75,000 will be dependent on the rental market with State help. The budgeted cost is €3.8bn.

Two Labour ministers within days have used 2020 as a target - every house in Ireland is being promised a high-speed broadband while responding to the social housing crisis is the priority .

1. Achieving a target of 35,000 units over six years is doable but an additional 75,000 rental units is another story.

2. Irish agricultural land is the most expensive in the world and the average price of a house in Dublin is about 10 times average national earnings. In bubble times 28% of the cost of a new house comprised VAT and other public charges - land accounted for 40% or more of the price.

3. The average size of a new Irish dwelling is 88 square metres; 115.5 in the Netherlands and 137 in Denmark - Ireland has the lowest population density in Western Europe.

4. Misreading the Ballymun social disaster coupled with Nimbyism has fed an aversion to high rise.

5. In June 40,000 BTL (buy-to-let) mortgages or 27% were in arrears - in bubble times employees were able to fund a mortgage on their homes and then get interest-only BTL mortgages for up to 10 years.

So search for yield or whatever, but getting credit after paying a deposit means the pool of BTL buyers will be restricted in coming years.

6. Rents in Dublin are 10% below the 2007 peak and the fear of annual rises while pay remains stagnant coupled with buying a home being out of reach, is not a pretty outlook.

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