Rental market shrinks by 80,000 homes in 10 years, housing conference told

The number of homes available to rent across the State has fallen by 80,000 in the last 10 years, estate agent Sherry FitzGerald claims.

“We have been discussing private landlords leaving the market for over a decade now,” the company’s managing director Marian Finnegan told a conference on housing hosted by the Irish Home Builders Association on Wednesday.

“In that time, we estimate that the gross loss is over 155,000 tenancies, the net loss is in the order of 80,000 units,” she said. “This is perhaps the principal factor underpinning the homelessness crisis,” Ms Finnegan said.

Traditional buy-to-let investors have been exiting the rental market at a rate of two to one on the back of higher taxes and increased regulation, aggravating the supply shortfall and pushing up rents.

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“We can no longer describe this as a housing crisis, it is a housing emergency and needs to be treated as such,” Ms Finnegan said. “The Government successfully steered the country through the Covid emergency, we now need the same approach to the housing emergency,” she said.

“In 2015, the Government was forecasting a need for 25,000 new builds a year. At this time, we knew the need was much greater, that in reality we needed over 35,000 units per annum. It took seven years for us to achieve the 25,000 units and because of this we are facing a housing emergency,” Ms Finnegan said.

“Today the market requires over 52,000 residential units to be built, each year to meet demand. This needs to accepted and planned for immediately, because if not this emergency has the potential to truly damage our economic success,” she said.

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Also speaking at the conference was the chief executive of home-building firm Glenveagh, Stephen Garvey, who said the single biggest obstacle to his company’s objective of building 3,000 homes a year (it currently builds about 2,000) was planning policy and the planning system.

“War is out of our control, supply chains are out of our control, interest rates are out of our control but planning policy is within the State’s control,” he said.

He said planning policy was making the housing crisis worse “because it’s stopping viability and making affordability worse”.

If the average industrial wage is €47,000-€48,000, a couple with a combined income of €90,000 can afford, in the context of the macroprudential rules, to pay about €360,000 for a home “but everything goes against you to produce that product”, he said.

He said An Bord Pleanála, which is due to be overhauled by the Government’s new Planning and Development Bill, was under-resourced, noting the agency had just 70 inspectors and 15 board members to regulate the entire planning system. Contrast this with the Central Bank which has 1,100 staff to regulate the financial system, he said.

“It was never scaled up properly,” Mr Garvey said.

While he accepted the need for higher-density building including apartments, he said apartments were not right for certain locations and they were now too costly to build for the purchase market. The average price to produce a two-bed apartment was €450,000, “it’s now drifting closer to €500,000”, he said.

Mr Garvey claimed the industry here could deliver 40,000 homes a year “if the right policies are put in place”.