“New housing package will increase the supply”, says CIF
The announcement yesterday evening (Thursday) by Minister for the Environment Alan Kelly that he is to reduce levies for construction and make changes to planning standards, will increase the supply of houses and lower construction costs significantly, according to the Construction Industry Federation (CIF).
Following yesterday’s agreement between Mr Kelly and Mr Noonan, officials are working on a memorandum to be presented to Ministers at their weekly meeting next Tuesday.
The loosening of the planning standards would allow for the construction of smaller apartments and reduce the need for apartments to be dual aspect, reduce the number of elevator shafts required and reduce the number of car parking spaces needed, particularly in developments close to public transport links. It is expected to reduce construction costs by up to €20,000.
The current situation where annual rent reviews are permitted is also to be changed, so that rents can only be reviewed every two years. This is expected to continue for the next four years, after which annual reviews may be permitted again.
Director General of the CIF Tom Parlon stated:
“The removal of costs in terms of the levies for starter homes up to €300,000 will directly lower the input costs of construction as they add between €8,000- €10,000 per unit. The high cost of construction of a new home- in many cases a burden higher than the selling price- is making the building of new homes completely unviable.”
