While it is still early days in the context of the planned reopening of Ireland and the Irish economy, bank customers who require a break from repaying their mortgages or loans because of the impact Covid-19 is having on their finances have only one month left to do so. A deadline for applications has been set by the European Banking Authority for 30 June 2020. Figures published to date show that 80,000 mortgage holders are now availing of payment breaks, with a further 36,000 availing of payment breaks relating to SME loans.
It is still much too early to assess the real impact of the pandemic on property market performance and how this is likely to influence 2020/2021 forecasts. Earlier this week, IRES Reit, which is now the largest property owner in the State, told RTE that the overall supply of new housing and apartments will inevitably be impacted negatively by the ongoing restrictions. While the Reit has so far “maintained strong occupancy and rent collection levels”, Chairman Declan Moylan acknowledged the “significant uncertainty” created by this pandemic. Significantly, IRES has continued to add to its portfolio throughout this period, acquiring a further 73 new apartments at Waterside and Tallaght Cross West, which indicates a robust balance sheet and reasonable confidence in the rental market.
This week, Hines submitted a planning application for 416 homes on the former Player Wills and Bailey Gibson site on Dublin’s South Circular Road. Interestingly, this application represents a comprehensive redesign and respecification of the shared areas to allow for social distancing. This is what is meant by the ‘new normal’ for property developers and it is a big undertaking.
Perhaps this is why news that Housing Minister Eoghan Murphy has no plans to review co-living guidelines in light of the Covid-19 pandemic has been met with such surprise – and criticism from within the Dail and outside of it. Co-living or ‘shared living’ was effectively supported as a distinct segment of the housing market by the Minister back in 2018 when he published a document on Sustainable Urban Housing: Design Standards for New Apartments Guidelines for Planning Authorities. Unfortunately, this has become something of a stick, frequently used by the opposition to metaphorically ‘beat’ the Minister. While there might be an element of political opportunism around raising the issue of co-living at this time, objectively, the current guidelines do not facilitate social distancing (minimum 12 metres squared space for single rooms and a 18 metres squared space for double rooms with all shared facilities).
Finally, if you are in need of some weekend reading, the Central Bank of Ireland published its 2019 Annual Report & Annual Performance Statement this week.
Managing Director / Business Development
Lotus Investment Group