A Week is a Long Time in Politics

After months of waiting, Ireland has a new government and our industry has a new figurehead.

Darragh O’Brien, previously the Fianna Fáil Spokesperson on Housing, Planning and Local Government, has now taken up the role of Minister for Housing, Local Government and Heritage. He was arguably the least opposing of the opposition to our previous Housing Minister and – on a practical level – his approach is unlikely to be vastly different to what we have come to expect from his Fine Gael predecessor. Frankly, after all this time and the uncertainty caused by the pandemic, this clarity is welcome.

And it comes at a time of hope for the industry. RTE reported this week on ‘Signs of recovery in some property market sectors’. This news piece was based largely on the latest CBRE research, which found that the commercial property sector in Ireland has effectively experienced a “lost quarter” during the period of Covid-19 restrictions, shutdown and tentative reopening of the marketplace. According to CBRE, “recovery is now in sight” for some sectors of the market. Both retail and hospitality are experiencing negative impacts that are unlikely to abate quickly. The report forecasts that these sectors look set to remain in the “eye of the storm” for some time yet. While those two sectors were lumped together for the purpose of this report, the reality is that retail was having something akin to an identity crisis in recent years, struggling to keep up with the changing demands of contemporary consumers chasing a more experiential offering when shopping offline. Convenience/corner grocery shops appear to have been the standout exception, benefitting hugely from the change in consumer behaviour over the period of lockdown.

Significantly, a key takeaway from the most recent research suggests that investor appetite for Irish commercial property remains strong, with “considerable fundraising” happening over the last quarter.

On a separate but related note, Nama has now transferred €2 billion in surplus cash back to the exchequer as it continues its wind-down by 2025 (or practical transition to the Land Development Agency?). Over the past six years, the agency and its borrowers have delivered 17,380 new homes, both private and social; however, it now transpires that over a third of the agency’s remaining 198 debtors are the subject of enforcement action to recover their loans. Nama redeemed the final portion of junior bonds earlier this year, leaving it debt free. A further/final €2 billion is scheduled for transfer back to the exchequer over the next two years. In terms of housing delivery, 2,250 new homes are currently under construction or approved for funding through Nama, while planning permission has been secured for a further 6,200 homes, which is positive.

Finally, I will leave you with the title of Paul McNeive’s Right Moves column in the Irish Independent yesterday as it sums up much of the industry thinking right now: ‘My advice to the new housing minister is this – borrow, demolish, build’. We could not have put it better ourselves.

Ian Lawlor
086 3625482

Managing Director
Lotus Investment Group