Strategic investment bank mooted
Speaking to RTÉ news, the minister was responding to the latest ESRI quarterly review of the economy, which found that the level of new house building was well below current demand.
The ESRI forecast the new household formation would average 20,000 each year until 2030.
However, only 8,000 new units were completed last year, which is expected to rise to 12,000 this year and 15,000 next year.
The ESRI identified the lack of credit available to property developers as one of the constraints on construction activity.
Head of the Construction Industry Federation, Tom Parlon, welcomed the findings of the ESRI report. “It’s positive that once more we are seeing the ESRI confirm that 25,000 houses need to be built in this country every year,” Mr Parlon said.
“Unfortunately we are a long way away from that figure. The past three years have seen successive record low levels of house building take place.
“The total number of units built dropped to only 8,301 houses and apartments last year and we don’t expect more than 10,000 units will be built this year.
“There’s no question that more house building would take place in this country if builders could overcome the barriers that are currently blocking their progress. Builders want to build. But there are a large number of hurdles that are preventing that from happening.
Mr Parlon also welcomed Ms Burton’s comments that potential a strategic investment bank could be used to fund construction projects.
“Builders can’t get access to usable finance for example. The banks have only started lending for housing projects in the last couple of months and even now the terms and conditions attached don’t make it impossible to move forward with viable projects.
“Construction companies are not in a position to come up with 30 to 50% of the equity that the banks now seem to be demanding. If they could afford half the project price they wouldn’t need a loan in the first place.”
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