House prices to rise amid shortage

21,000 target for new homes for this year In 2014 just over 11,000 new homes became available.

The failure to reach the Housing Agency’s target of 21,000 new homes this year will mean prices and rents will continue to rise, Property Industry Ireland has warned.

The latest report from the Housing Agency points out that 20,196 homes are needed each year between now and 2017 to meet demand.

“This year, as in previous years, we will miss the target,” said Property Industry Ireland director, Peter Stafford.

The situation, as well as causing further price and rent increases, would also erode the living standards of those trying to find a home, he said.

The agency’s report — the first of a series on housing supply and demand — shows that just over 11,000 new homes were made available last year.

Mr Stafford pointed to ongoing issues such as construction viability, access to finance, planning delays and the impact of the Central Bank mortgage lending rules on affordability.

“Practical measures to improve supply in high demand areas should begin with the budget,” he said.

Mr Stafford also believes a fundamental review is needed of the costs and regulation of housing, including Vat, development levies and planning costs.

The agency report warns that demand for housing will continue to increase, not just because the population continues to increase, but because household requirements had changed.

Because of the increase in one-person and single-parent households, buildings would not necessarily be smaller but would accommodate fewer people.

It refers to the Residential Land Availability Survey that shows that available zoned land nationally is capable of supporting over 414,000 housing units.

Chairman of the Housing Agency, Dr Conor Skehan, said accurate, timely and up- to-date data would ensure that new housing supply was the right type, in the right place, the right size and, crucially, that it was affordable.

He said increased supply would be gradual as the housing sector began to recover but that a “substantial step-up” in housing input is required over the next three years to meet the increasing demand.

Minister of State with responsibility for housing, Paudie Coffey, said the number of house completions had increased from 8,000 in 2013 to 11,016 last year.

During the first half of this year, 5,625 houses had been completed, up 16% on the first six months of last year.

He added that planning applications made during the first three months of this year were 30% up on the same period last year, indicating that there were many more projects in the pipeline.

However, the Housing Agency, said the number of applications was still quite low, given the demand for housing, and would have to be closely monitored.