If it seems that I dedicate a lot of my weekly columns to property, construction, and the housing crisis, well, it is because I do.
It is, sadly, the dominant issue of our generation, one that threatens the future wellbeing and prosperity of the country, and as we have seen in recent days in relation to the housing of asylum seekers, social cohesion also.
As Sinead outlined in her column last week, Ireland faces a myriad of medium term crises, ranging from farming to taxation to transport. However, to fix Ireland’s infrastructure deficit, we need to be able house the people that live in the country. It underpins everything.
This weekend, members of Europe’s most powerful business lobby group, the European Round Table for Industry, are in Dublin for a series of high-powered but low-profile meetings with Ireland’s leading politicians.
What sort of a city will they see? Clearly, they will see the trappings of economic wealth and the fruits of Ireland’s well-honed industrial policy. They will see a vibrant city, and a population proud to live in it. But, if they opt to, they will also see a city bursting at its seams, rising homelessness, and a growing number of asylum seekers camped in tents.
This is the physical manifestation of the housing crisis. But there are lots of manifestations that are not so visible: the generation of people living with their parents because they can’t afford or source a property. Or the increasing number of their friends and colleagues who have simply left.
Sadly, as the economist Ronan Lyons outlined last week, the situation is on the cusp of getting worse, particularly in the rental sector.
Ronan has been crunching the numbers for more than a decade now, mapping prices and trying to determine the optimum number of properties that need to be on the market. His research is sobering. In the 12 months to April 2023, just 30,000 rental homes were put online.
Based on his research over a 15-year window, that number should be something like 100,000 homes. When more than 100,000 homes were advertised over the course of a year, rents fell, while if fewer came online, then rents rose.
As Ronan put it in his column: “The gap, therefore, stands at 70,000 per year – and needs to be multiplied by the number of years of a typical tenancy. Ireland is missing at least 200,000 rental homes. And if anything, that number is growing, not shrinking, with each passing month.”
Ronan doubled down later in the week while speaking at Planning & Building for Tomorrow, a major property event hosted by the law firm Mason Hayes & Curran and moderated by Tom. In front of more than 700 industry stakeholders, Ronan was clear about the wider property outlook: things are likely to get worse.
“The next three years will be challenging due to external factors like costs and interest rates and the self-inflicted decisions of a cumbersome system. External factors will dominate but if we’re not building 50,000 plus houses a year, things are going to get worse,” he said.
Mason Hayes & Curran took advantage of the large, and informed, crowd in attendance, asking them a series of poll questions. The results are interesting, and in some cases, surprising, so I want to tease them through.
The audience were first asked to list out three changes that would have the biggest impact on boosting supply in the housing market. It was not a great surprise that streamlining the planning process was nearly in everyone’s top three. Talk to anyone trying to build anything and they will give you the war stories of officialdom, bureaucracy, cost creep and delays.
Likewise, a government funded infrastructure programme was also viewed as something that might work. What was startling was how little politics featured.
Just four per cent of the participants said that a change in government would significantly boost supply. Given that Sinn Féin, largely through the articulation of Eoin Ó'Broin, has outflanked the governing parties on the issue, this was interesting.
Here was a collection of individuals working at the coalface of the sector saying that the party in government did not really matter – instead, it was issues such as interest rates, Vat on residential development and grants for homebuyers. It seems that is the system, as opposed to the political choices, that is derailing the system.
There was also limited hope that the new Planning and Development Bill would reduce bottlenecks in the system.
Just 33 per cent said it would improve things, while 10 per cent said it would have a negative effect. The majority, some 57 per cent, said it would not make any difference.
Meanwhile, 66 per cent said that modular housing could make a significant contribution to the housing crisis. This was something that Arlene van Bosch, a senior development manager with the Land Development Agency, commented on.
“We need better assurances as an industry on the quality, the costs and the protocols in using modular housing. The speed at which modular houses can be constructed means that if those assurances are there, it could be a good option to explore. However, we need to ensure we don’t rely too heavily on one single solution when it comes to increased supply of new residences,” she cautioned.
She is right of course. But we need solutions, and we need them fast.
That was made clear by Fintan in his thoughtful column yesterday, when he looked at the blockage of a hotel housing migrants in Inch, Co Clare through the prism of political leadership and the wider housing crisis.
As Fintan put it: “We’ve a housing crisis that, despite our economic recovery and wealth, is many times greater than it was then with some of our young leaving home, not because, as in my day there was no work, but because they cannot find somewhere to live. We have more people today living in Direct Provision centres across the country than when it started as a ‘temporary measure’, over 20 years ago while we’ve other refugees and asylum seekers being moved around the country like pieces on a chess board.”
Sadly, the issue of our generation is not going away anytime soon.
Elsewhere last week, Vicki O’Toole sold a third-generation family business last year. It was a leading Irish packaging company and she now has time and money at her disposal. She told Rosanna about the deal, and what she is planning next.
Speaking of deals, we carried a number of significant interviews with major players in the corporate finance sector. Grant Thornton's head of corporate finance Paddy Dillon has been advising Irish companies for 18 years. He talked to Sean about the changing face of corporate Ireland, the M&A outlook, and helping business owners through the sales process.
Pegasus Capital has advised on up to 70 transactions since its launch at the height of the crisis, and now targets eight to 12 deals a year. Its partners provided Tom with a rare insight into the firm’s operations and the nature of dealmaking.
The Competition and Consumer Protection Commission has launched proceedings to compel the Irish Bookmakers Association to disclose material aimed at assisting the regulator in its investigations. Francesca broke the story.
Five United Irish Racecourses (UIR) tracks did not sign up to Horse Racing Ireland's new €47m-a-year media rights deal. Given their survival largely hinges on media rights money, why are they going solo? Johnny Ward went looking for answers.