The housing crisis will be a “permanent issue in Irish society” unless there is a radical rethink on how to deliver more affordable homes, industry body Irish Institutional Property (IIP) has warned.
In a report, the group warns that the supply of new homes is grossly out-of-kilter with demand and that this mismatch is “intrinsically linked” to affordability.
As many as 47,000 homes will have to be built each year for the next five years just to meet demand, it says, while noting that the Government’s target in Project Ireland 2040 is just 25,000.
It estimates that Dublin alone needs an additional 125,000 apartments to meet demand.
IIP also insists that land costs, often cited by critics of the State’s housing policy as a key driver of costs, is not a major expense and typically range from 8 to 18 per cent of the total delivery costs.
The report suggests there are certain costs that the private market must pass onto buyers and renters such as land, VAT and levies.
It suggests that these costs could be “subsumed” or “loaned” by the State to bring down the delivery cost of both housing and apartments.
“This policy may require the State to forego this cost in the short to medium term by way of an equity loan or home equity share arrangement as European Union market rules may not allow them to be forgone totally,” it says.