New-build prices are rising beyond reach of first-time buyers

THE price of new-build homes for first-time buyers is rising faster than the overall property market, according to an Irish housebuilder.

Last year, the overall market was up 2.2pc according to CSO figures. However, Glenveagh said the price was up 3pc in just the last six months of 2020 for starter homes.

It will be 2022 before much of the impact of this is seen, as most sale closings this year will be completed based on its prices in the first half of 2020.

It comes amid concerns from the Central Bank and the Economic and Social Research Institute (ERSI) that Housing Minister Darragh O’Brien’s Affordable Housing Bill will push up prices for this same segment of the market – driving homes further beyond the reach of would-be first-time buyers.

Last year, Glenveagh built 700 homes with an average selling price of €311,000, down from €321,000 in 2019.

Glenveagh CEO Stephen Garvey said there was “obviously that pent-up demand in the system and the problem is there isn’t enough access to housing out there, so that would tell you that we’ve a very robust market”.

“The supply-demand imbalance is the biggest issue for the country as a whole, to get that right. But we are a bit away from that and obviously the pandemic has set that trajectory back a good bit.”

The Affordable Housing Bill, published by Mr O’Brien earlier this year, includes a shared equity scheme, that critics say will drive up prices.

In relation to social housing, Mr Garvey backed public-private partnerships with local authorities to build mixed-tenure developments.

Mr Garvey said public-private partnerships delivered “a lot of good developments” in the 1990s.

“Particularly with the local authorities, where land was controlled by the local authorities and, in partnership with developers, there was an agreement put in place,” he said.

“Both parties came to the table with the object of delivering as many homes as possible, broken down into various tenures of both social housing, affordable housing, and private housing.”

Mr Garvey said that mixed-tenure housing was “the right way of delivering development”.

“It gives you the correct tenure, the correct balance of people in a particular development.

“Long term, that’s good for society.”

Yesterday, Glenveagh’s annual results reported underlying profit before tax of €4.5m in respect of last year, down 83pc on 2019.