€1bn housing resources unspent & 65,000 planned homes stuck in the system
It has been another revealing week for the Irish property market.
First, newly released figures show that the Department of Housing has failed to spend over €1 billion of its capital budget earmarked for housing between 2020 and 2022. The unspent funds could have provided an additional 4,000 social and affordable homes, which would have housed half of the total number of households currently in Department of Housing-funded emergency accommodation. The Department blamed Covid-19 restrictions and the Russian war on Ukraine for delays in project completion and increased construction cost inflation and supply-chain issues. However, political opposition argued that red tape and bureaucracy were the main reasons for the underspend.
Another factor holding back new housing supply is the slow and uncertain planning process, as highlighted by new data from Construction Information Services (CIS). Approximately 65,000 new residential units are currently caught up in planning appeals, judicial reviews, and Strategic Housing Developments processes. Dublin has the highest number of residential schemes currently on appeal, followed by Cork and Wicklow. The Strategic Housing Development process has 91 developments awaiting decisions, mostly from last year, equaling nearly 32,000 residential units. This is a matter of huge concern to Lotus IG clients right now.
The mishandling of the lifting of the eviction ban is also causing concern. The Residential Tenancies Board (RTB) shows that 4,329 notices of termination (NoT) were issued to renters in the final three months of last year, and over half of these were issued because landlords intended to sell the property. Charities and opposition TDs have called for the eviction ban to be reintroduced, while the Irish Property Owners Association points out that excessive regulatory and financial burdens continue to drive landlords out of the market. The Simon Communities of Ireland has expressed concern over the lack of options for families and individuals seeking accommodation, with a minimum of 7,348 households facing eviction over the next three months.
Lastly, the Irish Government’s plans to limit short-term property letting have been met with opposition from the European Commission. The proposed legislation would require owners who offer accommodation for up to 21 nights to register with Fáilte Ireland, which would monitor letting platforms for compliance. Those found to be in violation could face fines of up to €5,000, and online platforms could be fined for each property listed without a valid registration number. The legislation was initially expected to be enacted by the end of March, but the commission has extended a “standstill period” until December 22nd to consider the law. We will continue to watch this proposed regulatory change.
Lotus Investment Group