Sur­vey­ors say it will be 2026 be­fore hous­ing de­mand is met

The Irish Times - Business - - BUSINESS NEWS - PETER HAMIL­TON and EOIN BURKE-KENNEDY

Only by 2026 will Ire­land meet the de­mand of 35,000 homes re­quired to sat­isfy the hous­ing mar­ket, a pro­fes­sional con­struc­tion body has said.

The So­ci­ety of Char­tered Sur­vey­ors Ire­land (SCSI) has warned that the cur­rent hous­ing cri­sis is likely to con­tinue for just shy of a decade un­less the govern­ment im­ple­ments “a range of rad­i­cal and po­ten­tially un­palat­able poli­cies.”

One such un­palat­able pol­icy it men­tions is a re­duc­tion in the VAT rate which, SCSI di­rec­tor gen­eral Áine Myler says, could cut the cost of build­ing new homes.

“We pub­lished the ‘Real Cost of New House De­liv­ery’ last year and that showed the to­tal cost of de­liv­er­ing a three bed semi-de­tached house amounted to €330,000. Less than half of that - 45 per cent - was at­trib­ut­able to the bricks and mor­tar or hard costs of build­ing the house.

“The other 55 per cent in­cluded soft costs such as VAT, levies, fi­nanc­ing, profit, in­fra­struc­ture and land. Taxes and levies alone can rep­re­sent up to 18 per cent of the pur­chase price,” she said.

Ad­di­tion­ally, the SCSI sug­gested that the sys­tem of cap­i­tal gains tax be re­formed.

The move, they sug­gest, has had the un­in­tended con­se­quence of cre­at­ing a bar­rier to in­vest­ment.

“Af­ford­abil­ity is al­ready a huge is­sue for buy­ers and renters, es­pe­cially in Dublin and un­less tough de­ci­sions are taken the sit­u­a­tion will only get worse,” Ms Myler warned.

Mean­while, Prop­erty In­dus­try Ire­land (PII) has called for the re­ten­tion of the Govern­ment’s con­tro­ver­sial Help-to-Buy scheme in next month’s bud­get so as to give cer­tainty to the mar­ket.

The Ibec-af­fil­i­ated group that rep­re­sents busi­nesses in the prop­erty and con­struc­tion sec­tor claimed it was too early to as­sess the full im­pact of the ini­tia­tive as it was only in­tro­duced in Bud­get 2017.

“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,” PII di­rec­tor David Duffy said.

The scheme, which gives a max­i­mum €20,000 in­come tax re­fund for first-time buy­ers of newly built homes, was ex­pected to be abol­ished by the Govern­ment on the grounds that it had fu­elled fur­ther in­fla­tion in the prop­erty mar­ket.

How­ever, there is now spec­u­la­tion that Min­is­ter for Fi­nance Paschal Dono­hoe may opt tore­tain the scheme but un­der a re­vised for­mat with the State pos­si­bly tak­ing eq­uity in homes rather than pro­vid­ing grants.

Af­ford­abil­ity is al­ready a huge is­sue for buy­ers and renters, es­pe­cially in Dublin

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