Budget 2018 must focus on increasing the supply of new homes
Property Industry Ireland (PII), the Ibec group representing businesses working in the property sector, has said the upcoming Budget needs to focus on the urgent need to increase the supply of affordable housing. Speaking at the launch of the PII pre-Budget submission, Director, Dr David Duffy, stated: “Significant progress has been made in tackling the multitude of crises facing the Irish housing market over the past year, but a chronic shortage of supply remains. We are still facing a situation where the speed of demand for accommodation remains significantly higher than the speed of new homes being built. That is only set to continue as our population increases and as the influx of FDI expected post-Brexit places further demands on our housing and infrastructure.
“In our pre-Budget submission, we have called on Government to tackle the infrastructure barriers that are preventing the delivery of new homes by establishing a National Infrastructure Authority to identify and prioritise spend on essential infrastructure projects. This would go some way to ensuring a return to a functioning housing market, ready to deliver affordable homes for all.
“It is also important that there is a continual supply of new rental properties. The provision of property to the rental market is a business activity and should be treated as such by government policy.
“Policy certainty is important for the housing market. There has been a lot of focus in recent months on the Help-to-Buy scheme. One of its goals is to stimulate supply by providing home-builders with some certainty of demand. It can take up to 18 months to build a new home, so placing the spotlight on a scheme that is less than one year old diverts attention away from the real factors causing the housing crisis; the lack of supply.”
The main policy recommendations in the PII pre-Budget submission are:
-Retain the Help-to-Buy scheme introduced in Budget 2017 until its expiry on 31 December 2019. It is important that a clear message be sent by Government that the scheme will be retained to this date as certainty is required to ensure the scheme continues to have a positive impact on supply.
-Establish an independent National Infrastructure Authority to identify and prioritise spend on infrastructure projects.
-Establish a rolling fund for the provision of local infrastructure to un/under-serviced zoned land that has the potential to deliver housing or commercial development.
-Government should identify and sell any state/semi-state property holdings identified as part of Rebuilding Ireland Housing Land Map, which are currently not fully utilised and which Government/semi-state bodies would not purchase at their existing open market value.
-Optimise a commercial structure that enables the State to access private capital to build social houses at scale.
-Review local authority financing to ensure that local infrastructure and services are adequately financed.
-Establish a Rent Guarantee Scheme to ensure regional commercial property availability.
Dr Duffy continued: “Both the Minister for Finance and the Minister for Housing are very much aware of the detrimental impact the housing crisis is having on Irish society and are working hard to prioritise the supply of new homes. PII looks forward to engaging with the Ministers to implement pragmatic solutions to solving the housing crisis.”
