Just 5% of land sold by Nama for housing since 2014 has been put to use by “hoarding” developers in search of greater profits, it emerged yesterday.
Demand for new homes is highest in the greater Dublin area, but a small number of developers stand accused of holding back on developing their lands, even though planning permission has been granted.
Nama CEO Brendan McDonagh has said that there is a major issue with developers hoarding land waiting for a better return.
Mr McDonagh said that since the start of 2014, they have sold land that could provide up to 20,000 units — but just 5% of that has so far been delivered.
Mr McDonagh made his shocking comments at the Oireachtas Housing and Homelessness Committee.
He said that while there are a number of issues around planning and the density of housing, he believes owners and developers are waiting for a better return.
“One of the biggest issues, and I know the Committee has discussed this, looking at your transcripts, really is that there is an issue with people buying land, effectively looking for a higher rate of return,” he said.
But there were calls last night from members of the Oireachtas Housing Committee to have such hoarded lands sezied by way of compulsory purchase orders (CPOs).
Independent Alliance TD for Galway East, Sean Canney, highlighted the case of one major developer in the Dublin area building less than 50 homes since the start of 2015, despite holding more than 15% of the available zoned land.
Mr Canney said in such circumstances, local authorities should be given powers to buy the land by way of CPO and begin developing it.
“We must consider it as it is not acceptable at this time of crisis that such large pieces of land remain unused,” he told the Irish Examiner.
Mr Canney also highlighted a potential shortage in qualified tradespeople to build the homes which are badly needed.
A recent ESRI report found that despite a shortage of starter homes, particularly in the Dublin area, the report found the market in the capital may still not be profitable for developers.
However, developers might also be hoarding land in anticipation of higher prices and profits in the future, it said.
“Developers may be constrained by high construction costs in Dublin, planning regulations that add to costs, lack of suitable development land or may find it difficult to raise credit for larger projects,” the report said.