Cork home construction far from meeting annual housing demand

Construction began on just 658 new homes in the first nine months of this year in Cork city and county, even though the region requires 2,500 units annually to meet demand.

The Construction Industry Federation (CIF) said that, of the total, 346 were one-off, meaning they will not reach the open market.

CIF regional director Conor O’Connell said a 13.5% rise in rental prices illustrated the crisis in the Cork region in relation to housing supply.

He said his industry’s attempts to deliver the extra housing was being hampered by numerous factors, including a lack of development finance; restrictions on mortgage availability; a lack of serviced and zoned land; increased regulatory costs; and a lengthy planning process.

“The issue of costs is one area that can be immediately addressed by the Government to ensure that proposed housing developments can become viable again,” said Mr O’Connell.

“It is estimated that 40% of the cost of any house goes back to the Government in various levies and other forms of taxation.

"Costs need to be reduced immediately as this is the one area within the immediate control of the Government.”

Mr O’Connell estimated that VAT, development contribution scheme charges, bonds and other charges and levies alone could amount to €50,000 for a standard three-bed semi-detached house.

“If we are serious about addressing the growing crisis in housing supply, which is having dramatic effects on the rental market, on society as a whole and on inward investment, then immediate measures must be introduced to tackle the cost structures within the industry and all the other factors that are limiting the supply of housing.”