Irish Property Market Pulse – Issue #112

What can Irish builders learn from Australian Study?

An Australian news story about the need to deliver a greater range/choice of housing caught our attention earlier this week and it raised a few questions that might also apply to Ireland’s residential market. Looking beyond the sheer scale of the marketplace there, many Australian cities are actually quite similar to Ireland in terms of housing stock. Like Australia, Ireland also needs to diversify, alter and add to the traditional housing model we have grown accustomed to. What we refer to as NIMBYism in Ireland appears to be just as big a problem in Australia right now, with ‘vested interests’ taking priority over the growing population, increasing housing needs and changing consumer demands. 

As we know, Ireland needs to deliver more housing quickly and, as an industry, we are struggling to keep up with targets set by Rebuilding Ireland. Australia faces similar struggles but, interestingly, city residents there are actively looking for different models of housing that are not traditional apartments or houses. The study referenced in the article above shows clearly that residents are looking for smaller homes. 

Like in Ireland, the need to build smaller homes with less garden space has met with criticism and resistance from some quarters. You may not be aware that Australian cities have some of the largest homes and lowest densities in the world. Even in a country the size of Australia, this is not sustainable for contemporary cities.  Much of Australia’s housing stock is viewed as ‘underused’ as the aging demographic reside in homes way beyond their current needs thus causing the property stock/supply problems (does this sound familiar?). And it isn’t only the aging demographics that have influenced the housing market in Australia. Life has changed dramatically in recent years with more women working, more commuting and longer working hours. All of these trends make smaller homes more attractive to buyers. Yet, this is not what has being delivered to the market over the past decade – in Australian or Irish cities. 

In an attempt to address this supply and demand mismatch, Sydney reportedly completed 30,880 apartments in 2018, with another 194,000 in the pipeline. Irish builders need to pay attention to their pipeline, and not just volume, but type. We know that Ireland has one of the lowest rates of apartment living in Europe, despite apartments being the ideal solution for city workers. Viability is the crux of the challenge, we need to address this and work towards a solution, which will likely need State support. The reality is that family sizes have decreased in Ireland so the need for 4/5 bed houses with front and back gardens is lessening. Furthermore, buyers today cannot afford large homes with inflated price tags. Viability is the industry’s challenge, but there is a larger societal challenge that must be overcome. NIMBYism and the out-dated perception of what makes a home needs to change. Might great design and an innovative approach to planning by our newly-appointed Planning Regulator (OPR.ie) hold the key?

Ian Lawlor
086 3625482

Director / Business Development
Lotus Investment Group