Surveyors say it will be 2026 before housing demand is met
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