A group of policy-makers has heard that the housing crisis will not be resolved until there is a reduction in the cost of Government levies and taxation, estimated to be 36 per cent of the value of a new home at a forum hosted by the Construction Industry Federation (CIF ).
Speaking at the forum, Hubert Fitzpatrick, director of CIF, said: “Due to the cost of construction, many Irish homebuilders are finding that residential development is not viable. In many parts of the country, the cost of construction is so high relative to asking prices of existing houses they would be building at a loss. As a result, house building activity outside the Greater Dublin area is stalled.
“In the capital and other urban centres, there is insufficient supply to meet growing demand. Dublin is an economic engine; its population is growing rapidly and unemployment is dropping faster than other parts of the country. The Central Bank’s mortgage rules are freezing many first-time buyers out of the market. More people are forced to continue to rent well into their 30s. This in turn is putting upward pressure on rents and forcing some people into homelessness and onto the social housing lists and forcing people to buy their homes further from their work.”
Hugh O’Neill, chairman of the Irish Homebuilders Association, said: “The Government must now examine every cost they add to construction with a view to reducing it and make building viable again. VAT, levies, the time involved in the planning process and the impact of the Central Bank rules on access to finance must all be examined as part of the urgently required solution to the housing supply shortage.
“We’ve asked the Central Bank to refine its mortgage rules to generate a sustainable increase in supply to meet pent-up demand. To ensure the banking system is protected, a potential mortgage holder’s track record at paying rent can be taken into consideration by a mortgage provider before applying a higher loan to income ratio for select first-time buyers.”