Minister for Housing Darragh O’Brien said he remained confident the Government could meet its social housing targets this year despite scepticism about capacity within the construction sector and cost pressures across the economy.
Figures obtained by The Irish Times from the Department of Housing earlier this month showed that the State funded the delivery of 7,433 social homes – below its revised 8,000 target – in 2022 out of an overall target of 29,000 new homes under the Housing for All strategy.
The majority (54 per cent or 4,026 social housing units) were delivered by private developers through forward-purchasing agreements, the figures revealed, while 9 per cent or 1,408 units were purchased from private developers under part five of the Planning and Development Act and the remaining 27 per cent, some 1,976 units, were delivered by approved housing bodies (AHBs) or local authorities.
Mr O’Brien on Wednesday said he expected the Government to exceed its target of 9,100 social housing units for this year.
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Asked about the reasons for his optimism, the Fianna Fáil TD for Dublin Fingal said: “Raw numbers and projections and also knowing what’s in the ground. I base the projections that we have on what we know is in the pipeline, what we know is being constructed right now and looking at the completion rates.”
Despite the challenging environment “the pipeline is good”, he said, “with 19,000 social homes in the pipeline at various different stages of construction”.
The Minister was speaking at the launch of the Housing Finance Agency’s (HFA) 2022 annual report, which showed the semi-State funded the construction of 3,352 new social and affordable homes last year.
The agency, which raises funds through the National Treasury Management Agency and from international sources including the European Investment Bank and the Council of Europe Development Bank, lends money to AHBs, local authorities and third-level institutions to fund the development of social and cost-rental housing.
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HFA clients borrowed €853 million in 2022, the report indicates, up from €709 million in 2021 after approving loans worth a total of €1.2 billion.
Barry O’Leary, chief executive of the semi-State body, said approvals could reach €1.5 billion this year but that he was confident the agency would meet its target of €1.2 billion.
Looking ahead, he said the figures for the first half the year were promising. HFA clients have drawn down €304 million in loans in the six months to the end of June, a 4.5 per cent increase on the same period in 2022.
He said the numbers were particularly encouraging because the first half of the year is slower than the second. “There’s always a push on towards Christmas. We do serious lending and actual drawdowns between October and December are huge. That’s where the serious work goes on.”
While the outlook for the construction sector generally has improved throughout the year, scepticism about the Government’s ability to deliver on its overall target of 29,000 new homes this year remains.
The Central Bank said last week in its quarterly economic bullet that it expected 27,500 completions this year, with the construction sector “constrained by labour and material shortages, viability concerns with high construction input costs as well as tighter credit conditions”.
