'Viability gap' thwarting efforts to boost housing delivery, conference hears

The Government is working on a new housing plan which is expected to be published in a 'short couple of months'. File picture: Getty

This year will be a “defining period” for whether Ireland will get to grips with its housing crisis, a major homebuilding conference heard on Tuesday.

The Construction Industry Federation (CIF) — through its group Irish Home Builders Association — held the summit in Croke Park in Dublin with the group’s chair Michael Kelleher telling attendees that we must “use all the levers we have available” to boost housing delivery across the country.

“We need planning permissions that deliver schemes that are viable so we can deliver homes today,” Mr Kelleher, who is also the group operations director of the O’Flynn Group, said. 

“Only 20-30% of apartment permissions get built and become homes.” 

He said there is a chronic “viability gap” in apartment development with permission for 40,000 apartments not being activated in Dublin.

The conference came against the backdrop of the recently announced Trump tariffs that threaten the Irish economy, as well as numerous blockages to housing supply in Ireland.

Last year, just over 30,000 homes were built in Ireland and fears were raised that this may not rise — or could even fall — this year at the conference. 

Some speakers said the plan for a new “housing activation office” within Government may help considerably, with plans for the establishment of this office set to be announced shortly.

In a panel discussion, the department of housing’s top civil servant Graham Doyle said it is “disappointing” to see momentum that had built up in the sector “fall off a little bit last year”.

A lot of the deals for the apartments that delivered volume in ‘23 and ‘24 were done in 2018, 2019 and 2020 when money was a bit cheaper, when the circumstances were a little bit better and when we were a bit nicer to international capital as a country.

“So, we need to get that volume back in.” 

Mr Doyle said the Government is working on a new housing plan which is expected to be published in a “short couple of months”.

This plan will include amending current policies aimed at incentivising home building, such as the Croí Cónaithe scheme which aims to make apartments more viable.

"Some of them work better than others," he added.

Meanwhile, the Economic and Social Research Institute’s research professor Dr Kieran McQuinn, who was recently tapped to become Taoiseach Micheál Martin’s new economics advisor, stressed the threat of US tariffs shouldn’t deter Ireland from making critical investments in infrastructure in the coming years.

“In this country, we’ve had a procyclical approach to investment — when we have the money, we spend it, but when we don’t have the money, we don’t spend it,” he said.

“But also, it’s important that we learn the lessons of the financial crisis. I think it would be a very big mistake if we were to start rolling back on investment expenditure and capital expenditure if there was a slowdown.”