The Sunday Business PostFebruary 28, 2016

Property Plus6 Property

Rooms with a mountain view in new Dublin homes

Is there a real recovery in residential construction – and is it enough?

By Tina-Marie O’neill

Agent JLL is h a n d l i ng the sale of a new scheme of 11 generous four-bed-

room homes on the Ennisker-ry Road in Kilternan in south Dublin, which is launching to the market this weekend with prices starting from €595,000.

The homes at Struan Glen are laid out over three floors, come in a number of house types and range in size from 169 to 216 square metres.

Built by Stoneville Develop-ments, the layouts include one mid-terraced unit and two end-of-terrace homes, each spanning 181 square metres.

The mid-terraced unit is priced from €595,000. Of the two adjoining houses, one is priced at €610,000, while the other is the scheme’s show house and is priced at €685,000.

There are eight detached units, the smallest extend-ing to 169 square metres and priced at €695,000. Num-ber 11, of which there is only one type, extends to 208 square metres and is priced at €750,000.

The A2-rated dwellings offer a number of features, including nine-foot floor-to-ceiling heights windows and sliding doors that span the width of the houses leading to the rear gardens, high-end kitchens as standard and lux-urious bathrooms.

The modern kitchens in-

clude painted fitted and un-derlit units, as seen in the trendy show house kitchen, with polished stone work-tops and upstands, soft-close doors and drawers and a range of integrated applianc-es, including a dishwasher, fridge/freezer, a multi-func-tion double oven, microwave, five-burner gas hob and an extractor hood.

The adjoining utility rooms with additional storage units and pre-installed washing machines and dryers.

The bathrooms and en suites have white sanitary ware, fit-ted vanity units with mirrored cabinets, floor and wall tiling and fitted bath screens and shower doors.

A log-effect sealed gas stove is fitted in the living room of each unit as per the show house and, together with a list of energy-efficient heating and plumbing fixtures, each house has roof-mounted solar panels.

Outside, the front paved drives offer private parking and planter beds in front of each house, while the rear private gardens have gran-ite-paved patios and lawns.

Kilternan Village, in the foothills of the Dublin Moun-tains, offers a quiet, rural set-ting while being a short dis-tance from Enniskerry and Stepaside villages as well as Carrickmines Retail Park, the Luas and the M50.

The area has a choice of good primary and secondary schools as well as a great range of leisure facilities, including golf courses, horse riding, sce-

nic walks, the country’s only dry ski slope and is a ten-min-ute drive from Powerscourt

Estate and Waterfall, its golf courses, hotel and spa.

The show house is open

today from 3pm to 5pm. For more information, contact the agent at 01-6731600.

Anecdotal ev-idence sug-gests a broad recovery in the residen-tial construc-

tion sector, however, it is un-clear where the recovery is, what its magnitude is and if it is sustainable.

New figures soon to be released from buildinginfo.com shed some light on the specifics of this recovery and point to some answers.

There are three aspects to the residential construction sector: the home improve-ment/extension sector; the self-build, “one-off” sector, and the residential develop-ment sector.

The home improvement/extension sector is not de-fined by geographic or de-mographic factors and is a useful indicator of broad economic activity.

Figures show that the number of extension-type projects that started in 2015 was circa 5,100, an increase of 3 per cent and 10 per cent respectively when compared to 2014 and 2013.

However, this number only measures projects that re-quired planning permission (that is extensions that were greater than 40 square me-tres), so it would be fair to

assume it represents only the tip of the home improvement iceberg and that the real vol-ume of activity in this sector would be a multiple of that figure.

The one-off house sector, which accounts for about 3,000 units a year, is largely, but not exclusively, a rural phenomenon. One-off hous-es made up almost half of the entire housing units com-menced in the Connacht/Ulster region in 2015, for example.

This sector underwent some turbulent times recent-ly with the introduction of the new building regulations in March 2014. Initially there was a surge of commence-ments in early 2014 followed by a fallow period for the re-mainder of that year as the impact of the regulations hit home. Overall, commence-ments for 2014 were up 35 per cent on 2013. This level of growth was obviously unsus-tainable and this is evident in the fact that 2015 numbers were down 9 per cent when compared to 2014.

There has been a subse-quent roll-back on the build-ing regulations with regard to one-off housing where-by the owner/builder can elect to opt out. The impact of this change has yet to be fully seen. On the positive side, if compared to 2013, 2015 shows a healthy 22 per cent increase. Planning ap-plications for one-off houses are up 20 per cent year-on-year in 2014 vs 2015 to almost 7,000. This is the highest fig-ure in some years.

Exclusive research under-

taken by Building Informa-tion Ireland shows that resi-dential development projects with a total unit count of 15,500 started in 2015. This is an increase of 126 per cent on 2014.

The regional breakdown shows that over half of these are in Dublin and 30 per cent in the rest of Leinster. Typ-ically these are multiphase developments and will not be completed in one year.

Although 2015 has been by far the strongest year since 2008, it falls significantly short of the 25,000 units per year required, as suggested by recent ERSI reports.

Further analysis shows that the lead time from sub-mission of application for a residential development to actual commencement is 121 weeks. This suggests that permissions are in place for developments, but the climate to start is not quite there yet. Fresh thinking will be required to break the im-passe and square the circle of consumer demand, build price and available credit to potential homebuyers.

Overall, the metrics are all pointing in the right di-rection and recoveries of varying sorts are under way – depending on location – and we hope it is sustainable.

Full analysis of the con-struction industry by sector is available from buildinginfo.com.

Danny O’Shea is managing di-rector of Building Information Ireland, which monitors con-struction activity from plan-ning to completion nationwide

During the recession, the mantra was “I can’t sell, I can’t pay my mortgage, I can’t get rid of negative equity”. Six years on, it’s a case of “I can’t buy,

I can’t rent, I can’t build”.In a stable property market, prices

are determined by transactions, the market reacts up or down in response to supply and demand. One should be able to sell, buy or rent a home.

The current “can’t rents” are those who typically would like to or need to move from the family home to start a new phase in their lives.

The “can’t buys” are people who traditionally would have moved from renting to buying a first home or trad-ing up. They would have bought from those who have now become the “can’t builds”, builders who supply new

properties.The “can’t rents” and “can’t buys”

are unable to get a property because new homes are, by and large, not being built. It looks like new builds this year could be in the order of 13,000, about half what’s required. And a large por-tion of this figure will comprise one-off houses in the country, not in the cities where demand is greatest. Those already renting are staying put for lon-ger. This is resulting in intense demand, driving rental prices ever higher.

If either the “can’t rents” or “can’t buys” want to transmogrify into first-time buyers, they face large hurdles in financing a purchase following lending restrictions introduced by the Central Bank just over a year ago. The perfect bottleneck has formed.

Unless we tackle the fundamental problems that remain at the root of the housing crisis, it will continue to throw up unintended consequences, exacer-

bating rather than solving the issue.So what’s the solution? At its sim-

plest, making more properties avail-able through the “can’t builds” at affordable prices for the “can’t buys” so they free up rental properties for the “can’t rents”.

The first ingredient is the building site. We need to put more land into productive use in all our cities. It’s not complicated, the land is mostly avail-able and it’s lying idle. The vacant site levy, if large enough, will encourage current site owners to build or sell on to those who are in a position to build.

Ideally these houses should be ‘A’-rated and available at prices and sizes that the “can’t buys” could af-ford. One of the difficulties is that the new vacant site levy does not become payable until 2019, almost three years hence.

The new Development Contribution Rebate Scheme – a good incentive – is

intended to boost house construction in 2016 and 2017 by returning, subject to certain conditions, between 80 and 100 per cent rebate on development levies paid.

It should be extended beyond Dublin and Cork to prevent the kind of acute shortages in those cities reaching re-gional centres in the next 18 months.

It should also be extended in scope to include developments of fewer than 50 units. There is no solid rationale for excluding smaller builders, of whom there are many good and efficient ones around Ireland.

The availability of finance to build is another major aspect of the problem. The new government needs to incen-tivise builders by making building finance available at interest rates of 2 to 3 per cent. This would not be mezza-nine finance currently available at ex-orbitant rates of 20 per cent and more, but money made available in a sep-arate fund that the Irish government could readily borrow from the ECB at historically low rates. And it would be repaid to the government as the prop-erties are sold.

The status of the “can’t buys” needs to be reversed with larger loan-to-in-come ratios than the current 3.5 times salary set by the Central Bank. Those on the average wage should be in a

position to buy property, if that is what they wish. The availability of proper long-term fixed rates for periods of ten years and longer would also help. Only one Irish lender currently offers a ten-year fixed interest rate. The hous-ing crisis is, unfortunately, deepening despite some worthy effort from the government.

The issue needs a whole-of-gov-ernment approach. It is to be hoped that whatever new government will be formed in the next few weeks will

appoint a full cabinet minister with responsibility for the sector.

A property council comprising all stakeholders with varying and diver-gent views should be consulted with a view to advising the new minister. The process should be inclusive and rapid, not prolonged, with the government arriving at a plan for long-term sus-tainability in the housing market with short, medium and long-term goals.

Right now, social change is being forced upon people whether they like it or not. Those who wish to live in the cities are being pushed out into the suburbs and others who want to buy are being forced to rent.

Yet others – those at the bottom of the pyramid – are pushed into home-lessness. Such change is mostly affect-ing younger age groups and those with fewer resources.

Social change of this nature should not happen as a by-product of policy, or a lack of policy direction or even undue influence of specific sectors, but rather as a definitive vision arising from planning cohesively and thor-oughly for a sustainable property mar-ket. It can be done.

Pat Davitt is chief executive of IPAV, the Institute of Professional Auctioneers & Valuers

Time to help those who can’t buy, rent or build

The issue needs a whole-of-government approach

Pat Davitt

Danny O’Shea

The figures are pointing in the right direction, so let’s hope they’re sustainable

The kitchen has polished stone worktops and upstands and a range of integrated appliances

Struan Glen, a new scheme of 11 four-bedroom homes on the Enniskerry Road in Kilternan in south Dublin

A double bedroom at Struan Glen

With Central Bank lending restrictions and a lack of new builds and finance, the perfect bottleneck has formed in the housing market