Ciarán Hancock: Minister for housing needed to sort out crisis

This article originally appeared in The Irish Times

The number of departments involved in housing policy has led to a lack of leadership

‘Some 12 government departments and agencies have a role in setting and enforcing housing policy, which has led to a lack of focus and leadership.’ File photograph: Joe Giddens/PA Wire 

Judging by Lars Frisell’s comments in Sweden on Monday, the Central Bank of Ireland is not for turning on its mortgage lending rules, in spite of pressure from various quarters.

“One thing is clear, allowing lending and prices to spiral off again is not a solution, and would be a betrayal to the next generation of Irish home buyers,” said Frisell, an adviser to Central Bank governor Philip Lane.

“Higher deposit requirements slow individual households’ entry into the property market, but for borrowers collectively they are beneficial, as they prevent us from overbidding each other with ever-increasing amounts of borrowed money.”

So don’t hold your breath of any major changes to the macroprudential rules when the Central Bank’s review of them is published in November.

In the past fortnight, Property Industry Ireland (PII) submitted its ideas on how to solve the housing crisis to both the acting Government and the parties and groupings that might have a role to play in the next administration.

PII is a broad church representing the interests of developers, estate agents, surveyors, architects, lawyers, financiers and others connected with the sector.

High on its wish list is a reduction in the VAT rate on construction to 9 per cent from 13.5 per cent for the lifetime of the next government.

It argues this would reduce the cost to buyers of a new home, making the purchase more affordable.

It also wants emergency legislation introduced for three years to fast-track housing developments through the planning process.

PII believes that local authorities and An Bord Pleanála should have no more than 16 weeks to deal with applications.

The problem with reducing the VAT rate is that the industry would invariably want it to stick forever.

A similar reduction was introduced for the hotel and hospitality trade which it now doesn’t want to let go even though the numbers of tourists visiting Ireland are at an all-time high.

Minister for housing

A lack of transparency around the pricing of houses by developers would also make me wonder if the VAT reduction would be passed on in full.

 

Fast-tracking planning sounds great but it is essentially a tool to bypass local objections.

Within reason, planning authorities should be able to take their time to consider applications given the long-term and sometimes irreversible impact they can have on communities.

But there is one PII proposal that should be acted upon and that’s the recommendation that a cabinet-level minister for housing, planning and infrastructure be appointed to take charge of the housing crisis.

Some 12 government departments and agencies have a role in setting and enforcing housing policy, which has led to a lack of focus and leadership.

But we actually had a minister for housing, but who can name him?

It was Fine Gael TD Paudie Coffey, who was a junior minister with no clout and who operated in the considerable shadow of the Minister for Environment Alan Kelly. Coffey lost his Dáil seat in February and is now scrambling for election to the Seanad.

It’s amazing what can be achieved by direct action from Government. Operation Freeflow was introduced in 1996 to reduce congestion in Dublin in the run-up to Christmas after then taoiseach John Bruton’s car got stuck in traffic. It worked a treat until it was scrapped in 2011.

Veronica Guerin’s murder in 1996 led to the setting up of the Criminal Assets Bureau which has done excellent work on behalf of the State.

As minister for public expenditure and reform, Brendan Howlinoversaw pay cuts for public servants via the Fempi emergency legislation, and so helped restore the public finances to good order.

The current property crisis, in its many forms, has its roots in the 2008 banking and economic crash.

But a lack of focus at government level has also played a part in creating a situation where the supply of new housing is less than half the level of demand and families are living in hotel rooms in the absence of social housing.

Nama, private developers, the banks and so-called vulture funds have been left to sort out this problem. The time has come for someone in cabinet to take charge of the mess.

Ciarán Hancock: Minister for housing needed to sort out crisis 

Apartments are the future, but build costs are an issue

This article originally appeared in The Irish Independant

While apartments are still not financially viable for developers, they are much in demand

Bracken View at Bracken Park, Castleknock, where 23 apartments went on sale last year

'Really we don't have a choice. If we are going to stop Dublin heading all the way to Drogheda, and all the way to Athlone, we have to put a ring around it," says John O'Mahony, vice president of the Royal Institute of Architects of Ireland (RIAI), and managing director of architecture firm O'Mahony Pike.

"What we have to do is identify higher density cores within our suburban areas and develop them. You put apartments into them, which allow older people, empty-nesters, to move out, which releases stock to families to move into. This idea that you can build semi-detached houses forever doesn't work."

If we are to curtail urban sprawl and the rise of the four-hour-plus daily commute, apartment living seems to be the answer. And buyer demand is strong from both first-time buyers and those trading down.

Ken MacDonald of Hooke & MacDonald says they are finding "a continuing strong demand for apartments, particularly from owner-occupiers", among both first-time buyers keen to live close to the city centre, and those choosing to trade down from larger homes.

"There's a very strong market for apartments, especially in the city, and especially near strong transport links," says Stephen Day, divisional director of residential sales of Lisney. While investors are still interested in apartments, owner-occupiers will tend to be willing to pay a premium, he says. It's hard to quantify, but he estimates the figure as roughly 5pc more.

As with houses, shortage of supply is a huge problem. "It's cheaper to buy an existing apartment at the moment than it is to build a similar property, so it's not economically viable to build apartments. Except in, say, Ballsbridge or one or two other areas," says MacDonald.

As such, the majority of new apartments are at the higher end of the market, and are aimed at trade-down buyers who can afford high-quality homes in the more desirable parts of the city centre, such as Dublin 4, or the more picturesque suburbs like Clontarf, Greystones or Castleknock.

Hooke & MacDonald launched 23 apartments in Bracken Park, Castleknock, a Cosgrave development, in 2015, with all of the two-bed and three-bed units selling.

Sherry FitzGerald has had two launches: Seascape at Clontarf in March of last year, which has only five units left on the market, and 55 Percy Place, on the canal, which launched in January and has only one duplex apartment remaining.

Savills launched 31-33 Merrion Road early last year, and all 38 units have sold. It launched a second development of luxury apartments, Embassy Court, also in Ballsbridge, late last year and eight of the 10 first-phase units are sale-agreed. In both Seascape and Merrion Road, an overwhelming majority of the purchasers have been from the trading-down sector.

"The cost is higher than the sales value that you can actually get for apartments," says developer Aodan Bourke, director of Regency, the residential property development company. "A two-bed apartment in Dublin, unless you're in a wealthy 2, 4, or 6 area, is averaging around the €200,000 mark. You can't build an apartment for that; when you build in all the costs; you end up at a cost that is going to be above 200 grand."

Add on the costs of a basement space, and you are possibly looking at building costs of around €250,000-€260,000, he estimates.

"The whole issue of affordability, it is an issue, there is absolutely no doubt about it," says O'Mahony, who is currently working on Capital Dock, a development that will include over 200 apartments, and Project Trinity on the site of the former Jurys and Berkeley Court hotels in Ballsbridge, phase one of which will include 200 apartments.

"From talking to some of my developer clients, they have identified a price gap between what a couple can actually raise in terms of a mortgage and what can be built by a developer to elicit a profit. I don't in any way believe that there's land hoarding going on," he continues. "Any developer who sees a market and ignores it on the basis that he's going to hoard land and come back in two or three years' time, that's rubbish."

Building apartments is not just more costly than building houses, it yields a potentially slower return.

"The main issue with suburban apartments is the underground car park," says Savills' David Browne. "It's a significant cost. The other issue stopping apartment building is, with housing, the builder can go in, you might put a couple of million into building a pair of show houses, and doing up the entrance, for example, but you quickly get your money out of it because you sell them down as you go, whereas with apartments you have to build the whole thing before you get one penny back. So it's much more difficult to fund."

The updated Planning Guidelines on Design Standards for New Apartments issued last December by the Department of the Environment were criticised for introducing smaller overall size guidelines. According to O'Mahony, however, "they have made a considerable improvement on the efficiency of apartment development" by reducing the number of dual-aspect units required, and allowing more units per corridor.

"We ran a test on it to see what the impact would be in a typical urban block and what we discovered is that you effectively halve the number of [lift] cores that you need to service an urban block without, in our view, reducing the quality of the units."

The new regulations "will make it more economical to build apartments, because you'll be able to get more to the core", says developer Michael Cosgrave, who launches another block of apartments in Bracken Park late next month.

The quality of apartments coming on the market is undoubtedly improving, and both increased storage space and additional on- site amenities are a feature - the Boland's Quay development, which will be brought to the market towards the end of 2018 by DNG, will have 41 apartment units, and include a gym, restaurants and cafes on site.

However, our adoption of apartment living as a lifestyle still has a long way to go.

"I think people are very much still using apartments as a stepping stone," says Stephen Day of Lisney.

"Unfortunately, in this country we have a poor view of apartments, whether it be that they may not have been built properly in the past, and also management companies have been very poorly [run]. That has exacerbated the public's perception of apartments. Also, prior to the regulations in 2007, a lot of apartments were very small, and we got that whole shoe-box scenario. All of those things together have led to people not being particularly enamoured with apartments," says Aodan Bourke.

O'Mahony identifies an important change in the nature of apartment development in Dublin. "Before the bust, apartments were almost solely built for sale. So developers would build apartment developments, sell them and move on. So their responsibilities disappeared.

"What we're getting now is that the thrust of development of apartments in the city areas is now actually being taken over by the multi-family development. That is, the development that's built to rent," he explains, citing investment firms Kennedy Wilson and Hines as examples. "Because of the affordability issue, the development of apartments, particularly in the city centre, is falling predominantly into that sector, which is really being dominated by the investors who have bought into that market.

"Now this is actually a whole new market to Ireland," O'Mahony points out. "But there are huge benefits to it in so far as it's being developed by developers who have a long-term experience in managing and renting apartments."

Apartments are the future, but build costs are an issue

Construction hits €5.6bn value but new homes lag

This article originally appeared in The Irish Independant

The value of new construction projects in Ireland surged 68pc last year as activity in the sector continued to pick up

Margaret Sweeney of Women for Europe (and Chief Executive of Postbank)


According to a new report from Construction Information Services (CIS) which measures activity in the property sector, builders broke ground on 2,213 new projects worth €5.6bn during 2015. That is a huge increase on 2014's 1,437 projects.

But the number of new homes being built is far below the levels needed to ease the housing crisis, with less than half the number of new homes needed being built at present.

The report, which excludes projects such as one-off housing or fire safety certificate work, tries to quantify big ticket projects around the country.

Perhaps unsurprisingly the Dublin area dominates.

The CIS data shows the city and its surrounding area accounted for an estimated 53pc of all projects. That percentage fell slightly though year-on-year, in a sign that the recovery is starting to be felt beyond the city.

In 2014, 56pc of new projects were being carried out in Dublin. Its dominance continues in the value of new projects for which planning permission is being sought, but again, the proportion is lower than this time last year. About 54pc of the value of all projects that received planning approval were located in Dublin during 2015 - down from 63pc in 2014.

The CIS noted that this change "can partly be explained by the Project Cherrywood application, so when total number of projects are looked at, this statistical skew can be seen".

US investment giant Hines submitted plans for a €2.5bn development at Cherrywood in west Dublin.

The figures show that residential development jumped 150pc during the previous 12 months, with projects worth €1.5bn on site now. But construction is still far behind what is needed in the country to ease the housing crisis.

The data shows that 4,706 houses went "on-site in 2014 and in 2015, house building increased to over 11,000". Most analysts estimate the country needs about 25,000 new homes every year to meet demand. But even the new projects are moving forward slowly. Many going on site this year are doing so on a phased basis only and are not all coming on stream immediately, the CIS said.

The crisis shows no sign of improving. "It is anticipated that approximately 12,000 units will be built in 2016, which is less than half of that required to meet normal demand," the CIS said.

Meanwhile former Dublin Airport Authority chief executive Margaret Sweeney, inset, has joined IRES Reit as a non-executive director. Ms Sweeney is also a former head of PostBank. She was president of the Dublin Chamber of Commerce from 2008 to 2009.

IRES has also named Phillip Burns as a non-executive director. Mr Burns is the founder of Maple Knoll Capital and was CEO of Corestate Capital as well as being a senior executive with private equity giant Terra Firma and Goldman Sachs.

He was also a corporate attorney at the giant US law firm Skadden Arps.

Elsewhere, IRES chief executive David Erhlich took home €753,000 in pay and bonuses last year as the listed property firm ramped up its property purchases in Ireland.

The company is the biggest private landlord in the country.

Construction hits €5.6bn value but new homes lag

How To Solve The First Time Buyer Mortgage Maze !

For first time buyers the mortgage process can seem complex and confusing.  On top of everything else you need to figure out interest rates, loan terms, fixed versus adjustable rate mortgages and much more.  In order to simplify and streamline the process it is best to do some research before you go and apply for a mortgage. Recommendations and endorsements in any sphere of life are always a good way to start so do your homework. There are a vast amount of financial institutions offering a vast array of mortgage products so contrast and compare.

Be In The Know 

You will need to have some cash in the bank before you can buy a home and many first time home buyers are surprised at the amount.  There are other financial factors to be taken into account not just your savings record.  Of course proof of your ability to save and thus in the future repay your mortgage is important but this only one component. Check your credit history i.e. repayments of previous loans to make sure that there are no issues from the past.  Financial institutions will take into account your current earnings but also into consideration what effect any change in your personal circumstances may have on your repayment capacity.

Plan For Out Of Pocket Expenses 

Once you have selected your chosen property and successfully gone sale agreed other additional costs will include a solicitor to handle the conveyancing on your behalf.  In most cases a structural survey will have to be carried out on the property by a Quantity Surveyor or Architect which you will have to pay for.  An independent valuation on behalf of the lending institution you are getting your mortgage through is obligatory and the fee involved has to be paid by you too.

So don’t forget the additional costs that can sometimes be overlooked and then cause a lot of stress. Moving of furniture budgeted in advance will make your closing date when you will finally get the keys of your new home a day to enjoy.  To avoid  stress plan well in advance and have the additional kitty close at hand so that your home purchase will be one of the best days of your life.

Enjoy The Experience

When it comes to buying your first home it can be a very exciting as well as a nerve wrecking time. By doing your research and preparing yourself for the process you can ensure it goes more smoothly and ensure you do not run into any nasty surprises.  Once you get that mortgage approval in principle letter from your chosen lender you can then start the fun part of searching for your first home!

Learn More

How To Present Your Property In The Best Light !

Whether it is a romantic dining room or a home office finding the right lighting for each space in your home is essential in making it functional and inviting.

So what should you consider when choosing lamps or lighting fixtures to ensure that they will provide the right kind of light while still fitting in with the décor of the room?

Function Before Fashion  

Naturally you want your lighting choices to match and complement the décor of your home. If they are not the right functional choice for the space your initial infatuation with them will likely fade.

For work spaces such as kitchens be sure your lighting will provide ample brightness while also being easy on the eyes.  For rooms such as the living room or dining room you'll want to consider lighting sources that are adjustable to allow for relaxation and a romantic atmosphere.  It is important to remember that these areas will also be used for work and play so they should also provide adequate light.  Be sure to consider the financial and environmental impact of the type of lighting you use. Using energy efficient bulbs and dimmers can reduce your carbon footprint and your electricity bill.

Size Matters!

If you have a small dining room then choosing that large ballroom sized chandelier you fell in love with may not be the best idea.  Recessed lighting for a large foyer while functional can make the space feel cold and uninspired.  Always make sure that the fixtures or lamps you choose are proportional to the space as this will make the room look well designed.

Using Light As Decoration

While choosing lighting requires balancing form and function lighting can also be a great way to highlight existing features in a room.  Whether it is a painting or mirror over the mantelpiece or a unique feature using lighting to highlight them can add a finished and dramatic look to any room.

Lighting can really make the difference and all the hard work you put into choosing it will compliment the other décor elements.  It will be well worth the time and effort to truly finish off your property and make it look spectacular!

Learn More

How To Make More Space !

If you live in a small home you may face some particular decorating challenges. Getting comfort and style while reducing clutter can be done with a few smart furniture choices and a good understanding of colours.

Keep It Light And Bright 

Dark colours always make a room look smaller so stick to lighter shades for small rooms.  If you absolutely love deep red or chocolate brown there is no reason why you cannot make it a part of your room.  However maybe use it on one wall rather than throughout so that is may be presented as a feature.  Try to choose lighter tones for the flooring and the largest pieces of furniture in the room.

Darker more vibrant colours are perfect for things such as cushions , vases and other decorative pieces.  They will bring those richer colours into the space without overwhelming it and making it feel dark and cramped.

Choose Furniture Carefully 

Save space by making your furniture multi task for you.  Look for coffee and end tables that include storage for books, remote controls, and magazines.  Choose furniture that provides hidden storage where you can stash extra blankets and other items.  If you occasionally need a larger dining room table, pick one with a butterfly leaf that can easily be tucked away when not in use.

Look for an all-in-one entertainment unit for your television and components that will allow you to tuck things away out of sight to prevent clutter.  A unit that includes storage for DVDs and CDs provides even more use but watch out that the piece is not so large as to dwarf the room.

Walls And Windows Are Important Too

Putting too much on the walls contributes to the feeling of clutter.  So it is best to keep it simple and only showcase a few favourite paintings.  It is recommended not to have to many family photos on view and don't hang too many photos in one place.

If possible choose sheer or semi-sheer window coverings in light colours to allow more light into the room.  Dark heavy curtains will contribute to the small and claustrophobic feeling small spaces can too easily have.

Small spaces can be just as elegant as large ones and feel a lot bigger than they are if you make smart decorating choices.  Make the best use of all your square footage and keep it light and airy for the best results.

Learn More

Council raises grave concerns about Raheny development

This article originally appeared in The Irish Times

Some 380 houses and apartments sought for lands adjoining St Anne’s Park

Developers Pat Crean and Greg Kavanagh sought permission to build 107 houses and 274 apartments on former playing fields of St Paul’s College in Raheny, Dublin. Photograph: Nick Bradshaw



Dublin City Council has raised “grave concerns” over plans for almost 400 houses and apartments on former religious order lands adjoining St Anne’s Park in Raheny.

Developers Greg Kavanagh and Pat Crean last November sought permission to build 107 houses and 274 apartments on former playing fields of St Paul’s College.

Close to 300 objections have been lodged against the scheme, with most local politicians and election candidates opposing the development.

The council has now ordered the developers to make significant changes to the scheme, including scrapping two of the six blocks of apartments and redesigning others that had the potential to “create areas of anti-social behaviour”. 

It has also expressed concern about the loss of the existing sports facilities and the quality of life of future residents.

The council will not consider the current application and has given the developers six months to resubmit their plans.

Playing fields

Mr Crean and Mr Kavanagh, who describes himself as “the Ronaldo of the property market”, last year bought 15 acres of land, part of the playing fields of the school, from the Vincentian Order.

As part of the deal the developers agreed to provide the school with new sports facilities including a Croke Park-size all- weather floodlit pitch, an all- weather floodlit training pitch and a new multi-use indoor sports centre. 

However, the council said it had “grave concerns” about these facilities and their effect on future residents in terms of noise and light pollution. “The pitch would be floodlit with six floodlights 18 metres in height. The front elevations of the houses would be located 18.4 metres from the pitch fence and lighting poles,” it said.

The developers were also required to provide replacement sporting facilities for nonschool users of the old pitches, the council said, and it queried how Clontarf GAA club would be accommodated, given the “current lack of capacity for GAA in St Anne’s Park”.

The council also said the new school sports facilities could not be considered as satisfying the public open space requirements of the development.

However, the strongest concerns were expressed over the quality of the proposed apartment blocks. The layout of the houses and apartments was unacceptable and needed to be reviewed in its entirety, the council said. Two of the five-storey apartment blocks needed to be omitted and two more were excessive in length and had archways with the potential to create areas of anti-social behaviour.

Development sites 

Mr Kavanagh and Mr Crean, funded by London-based hedge fund M&G Investments, have spent more than €300 million buying development sites in Dublin in recent years, largely at the bottom of the property market. They have applications on hand to build more than 1,500 homes around the city and county, which would make them one of the capital’s largest housing developers. 

Council raises grave concerns about Raheny development

Property market still depressed with sales at 50% below ‘normal’

This article originally appeared in the Irish Times

New research suggests number of property transactions has not recovered from crash   

In Dublin, where demand for housing is strongest, new housing represented 16.9 per cent of all buildings under construction in the State.

Turnover of Irish residential property is barely 50 per cent of what is considered “normal” in a healthy housing market.

According to GeoDirectory, the State’s largest property database, there were just 43,428 residential property transactions last year from a total housing stock of more than two million.

This equates to a national turnover rate of 2.2 per cent, well below the 4-5 per cent considered normal for a functioning property market.

The low transaction rate reflects the current shortage of property on the market as well as tougher credit conditions linked to new mortgage lending rules.

Of the total transactions recorded last year, only 13 per cent represented by new properties while 87 per cent were second-hand property transactions.

Combining data from the property price register and the latest population census, GeoDirectory found Dublin had the highest average transaction price at €356,194, followed by Wicklow (€296,045) and Kildare (€244,543).

Longford had the lowest average transaction price in Ireland at €78,934, up from €75,583 in August 2015, followed by Roscommon at €90,728.

At a construction level, there was only a small number of residential buildings added to the database nationally.

A total 3,957 buildings were classified as being under construction in the GeoDirectory Database in the final quarter of 2015, up slightly on the second quarter number of 3,786.

In Dublin, where demand for housing is strongest, new housing represented 16.9 per cent of all buildings under construction in the State. Building activity, meanwhile, remained slow in Roscommon and Leitrim where fewer than 40 buildings were under construction in each county.

Kildare witnessed a significant increase in the number of buildings under construction, up to 253 buildings final quarter from 19 the previous year.

This might be down to a larger number of people being pushed to move outside the capital by rising house prices, the report said.

According to the GeoView report, Dublin had the highest residential density per square kilometre (572 dwellings per square km) by a large margin. The next highest ranked county, Louth (63), had a substantially lower density, followed by Kildare (47). Leitrim and Mayo (both 12) had the lowest residential densities.

GeoDirectory’s chief executive Dara Keogh said: “We’ve seen a consistent picture over the last two - three years, with demand outstripping supply in the more urban areas, while the market remains sluggish in large parts of rural Ireland.”

Annette Hughes, director of DKM Economic Consultants said: “ The key statistic which the report highlighted was that the national average housing turnover rate in the year to December 2015 stood at 2.2 per cent.

“This rate is showing very few signs of improving and is still well below what would be deemed to be a more normal housing turnover rate of around 4 per cent to 5 per cent,” she said.

A separate report by the Society of Chartered Surveyors Ireland found residential development land values increased in by 19.7 per cent in Dublin, 16.7 per cent in Munster, 15.1 per cent in Leinster and 10 per cent in Connacht/Ulster.

The group anticipates residential development land values in Dublin would increase by around 12.1 per cent this year. 

Property market still depressed with sales at 50% below ‘normal’

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