Eoghan Murphy Receiving Heavy Criticism Over Co-Living Scheme

Minister of Housing, Eoghan Murphy, has been receiving heavy criticism since publicly supporting the co-living plan in Ireland. In co-living private spaces such as a bedroom or bathroom is owned privately, while, public spaces like kitchens and living rooms are shared among different tenants. Eoghan Murphy calls these new co-living buildings being built as, “very trendy boutique hotels.” This statement has triggered many heated responses from people who believe this type of living is horrible. Some of the critics that he has received includes being called, “out of touch” and a person asked, “what planet is this Minister living on”.

In support of Eoghan Murphy, there has been success in these types of living spaces all throughout Europe and North America. If the developer puts enough money into the space it can become a great option for younger adults seeking more affordable housing options. These spaces do hinder one’s privacy, but it also encourages a sense of community and meeting new people. This could also be an attractive scheme for young adults moving to Ireland for work who do not …

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Construction slowing in new home development sector

With competition for loan approval building, home development companies are feeling the heat. This year has proved to be one of the most difficult for possible consumers to obtain loans, largely due to the uncertainty that Brexit brings to the table. Due to the lack of accessibility of funds when attempting to purchase a home, many homes have simply gone unfilled. 

Goodbody Stockbrokers, a  company that specializes in asset management and global investment funds, has taken a clear interest to the changes that are currently happening in the market. This company developed a house building tracker, which in turn showed that from April to June 2019 there was a sharp decline in the output of newly developed housing. 

This is largely due to the fact that without the high availability of loans, many homes simply are not getting sold. In the lower priced areas of the housing market, there is significant competition but any home that is priced at or above €500,000 has been struggling to get off the market. In general, this trend is showing that affordability is becoming …

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Rebuilding Ireland is Outdated

The launch of Rebuilding Ireland has just surpassed three years. Many factors have changed since the original plan was initiated. Some figures that were estimated at the time of the launch for Rebuilding Ireland are now out of date. Rebuilding Ireland needs to be re-examined for optimal use because it is not performing as it was initially supposed to.

When the plan was originally drafted, it was predicted that the current number of homeless people would be 65% lower than the current number. The plan was not originally supposed to solve the homeless problem of this magnitude (10,000+ people) which is one of the reasons why it is ineffective. Everybody that is involved in the housing crisis believes this number is lower than what the current statistic is and is not an accurate reflection. with that are not included in this study are people who are crowd surfing, people doubling up with their family, and people sleeping rough. In addition, the 800 people that have been granted refugee or protection are not calculated for.

The prior Minister for Housing signaled …

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Fast-Track Planning System

The fast-track planning system was introduced in 2017 by the Housing Minister Eoghan Murphy. The program was aimed at expediting large scale developments and introduced the system for strategic housing development legislation. The fast track planning system is now subject to undergo public review.

The strategic housing scheme allowed fast track decision making for large scale housing schemes. The legislation allowed developers planning to build large scale housing schemes to make their case directly to the An Bord Pleanala. This allowed developers to by pass local authority decision making processes and thus, the planning  process is expedited. With out the fast track planning system, large scale developments would have to be approved by local authorities and then could be appealed to An Bord Pleanala.

The Strategic Housing Development system gave effect to the commitment in Rebuilding Ireland. This commitment is defined as “fast-track” devision making for large scale housing and student accommodation schemes.

According to the rules of the fast track housing planning system, developers building sites with 100 or more housing units or 200 or more student housing units …

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Outlook on the Irish Housing Market

Key issues regarding the stability of the Irish economy seen in the housing market. The key issue of the housing crisis can be defined as growing demand that is not meet by current supply.

Many current government policies are concerned with increasing the volume of supply of completing housing units. For example, Rebuilding Ireland is associated with increasing housing supply to reduce homelessness. However, over the past 3 years supply has increased but housing prices have increased at a rate higher than the increase in supply. Governmental policies focus too much on supplying more volume instead of focusing on the affordability of housing.

According to Goodbody BER Housebulding Tracker, it is estimated that an additional 18,855 new housing units were added in 2018. This estimation is in line with previous forecasts. The majority of new dwelling competitions in 2018 were located in the Greater Dublin Area. More specifically, housing completions in the Greater Dublin Area accounted for 60% of the total new housing schemes in 2018. Although there has been an increase in the supply of housing, many problems in …

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Government Housing Fund is Collecting Dust

The Irish government has allocated a large portion of their budget to address the current housing shortage and crisis that is plaguing Ireland. However, due to red tape and many other impediments, much of the budget has not been used yet and is sitting and collecting dust at the moment. Approximately 8% of the 200 million Euro government housing fund has been spent and many people are not happy about this.

The Local Infrastructure Housing Activation Fund (LIHAF) was originally allocated 195 million Euros in 2016. Since then only 16 million has been spent and the majority of the budget has been sitting in an account. One of the major problems hindering efficient construction sites is Ireland’s outdated infrastructure. This fund was created to provide investment in public off-site infrastructure including; roads and water. This would cut down costs and time for delivering properties. This fund was created during the government’s creation of the Rebuilding Ireland policy to tackle homelessness and housing issues.

Infrastructure projects have been approved to begin under the fund, but not many have taken off. 30 …

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Inflation Rates Return to Normal

 

The current housing prices in Dublin have been talked about extensively recently. The newest trend shows that housing prices have reached peak affordability and now some of the wealthy classes of people are having trouble affording homes. Current house prices in Dublin are more than nine times the average salary making them unattainable for the majority of people because mortgages can only be 3.5 times your salary. Additionally, these numbers have not been seen since the Celtic Tiger Era, however, the central bank has been more careful this time and increased borrowing rules unlike during the Celtic Tiger Era. Prices are now beginning to slow down because simply nobody is able to afford them.

Inflation has also cooled off recently with a decrease from 12.4% last May to 2.8% a year later. Dublin has seen a significantly smaller inflation rate with an increase of prices from the current year to May of .6%.

The region of Dublin had the highest median price of 366,000 Euros which is just over 9 times more than its average salary of 40,000 Euros. …

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High land prices keeps developers from supplying homes that are demanded

High costs of land is making developers unable to supply homes that are truly needed to solve the housing crisis. According to a leading developer, land prices specifically need to be reduced by 25% to 35% to meet Ireland’s real demand for housing.

The development company, O’Flynn Group is currently developing 1,600  new housing units across 11 sites in Dublin and Cork. O’Flynn Group’s chief executive, Michael Flynn stated that Ireland’s residential construction activity may be nearing a plateau. He reasons his statement because of restricting limits of supplying homes, ranging from mortgage lending limits to skill shortages in construction. Regulation serves as another limiting factor in supplying homes.

According to O’Flynn, the real demand for housing is twice the amount developers are able to deliver. He continues to denote that if artificial restrictions are not limited, and demand for affordable housing is not met than the housing crisis will only continue. Lastly, he noted that more households will be forced into the rental sector with out the hope of saving if the trends previously described continue.

O’Flynn was prompted …

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Vulture funds and Ulster Bank

Ulster Bank has recently created a portfolio of €900 million of problem mortgages for sale. This portfolio includes an immense number in which borrowers had short term forbearance deals with Ulster Bank. Forbearance is a special agreement formed with a lender and borrower to delay a foreclosure. This occurs when mortgage borrowers are unable to repay according to terms and lender may choose to foreclose the property or asset.

Many of the affected borrowers for loan sales were engaged with the bank to secure least short term debt deals. However, Ulster Bank has claims that past customers who engages with the bank to make repayments of loans even on loans in the past are far less likely to see their loan sold to a vulture fund.

Vulture funds are generally private equity firms or a form of financing that is provided by firms to invest in properties that are performing poorly. These poor performance properties are likely to be undervalued and thus the vulture funds take advantage of the underestimated properties.

Private home mortgages on average in the current sale have …

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Housing and the Changing Demographics of Ireland

In order to solve the housing crisis, policy makers must consider changing demographics and plan for long term methods to resolve the housing crisis. According to Engineer’s Ireland review of housing in the The state of Ireland 2019, projections of future Irish population is increasing in number, age and diversity. The population is expected to grow from 2.78 people in 2017 to between 5.6 to 6.7 million people in 2051. The median forecast was defined as approximately 6.2 million people. An additional 1.48 million people must be housed in the next 32 years.

Future demographic projections are essential in forming adequate long term planning in regard to housing in Ireland. Due to the significant projected increase in population size, there is great demand to increase housing supply and plan accordingly.  The current average size of an Irish household is 2.7 people per home. If the average household size remains the same, the number of homes supplied must amount to at least 548,148 additional units by 2051. This amounts to an average of 15,661 additional housing units must supplied each year …

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