Michael O’Flynn warns of speculators

Optional zoning preference should be given to builders with a proven record and who can and will build houses, rather than allowing speculators get in between to add further cost to land and drive up house price further, one of the country’s top developers has asserted.
Michael O’Flynn warns of speculators

That call was made by developer Michael O’Flynn at last week’s Cork County Council ‘Let’s Grow Cork Together’ business briefing on Metropolitan Cork’s development strategy to 2050.

However, even as County Manager Tim Lucey warned that there was only enough zoned and serviced land with infrastructure in place for 18 months of much-needed housing supply, builder Michael O’Flynn said a lot of it will come in time ..but it won’t come immediately.

“I’d contend it is much less than that, because a lot of the land in that year-and-a-half supply that you have given is not marketable at this point in time, so it’s not viable, really.”

The housing shortage was impacting on jobs and future FDI arrivals, said Mr O’Flynn, noting that the Cork region had special outside funding issues for infrastructure to accommodate forecast growth, and he expressed regret that Budget 2017 didn’t tackle VAT on new homes to boost supply and affordability.

Welcoming Cork Co Council CEO Tim’s Lucey’s comments on optional zoning initiatives at County Hall’s breakfast briefing, Mr O’Flynn said, “I think preference should be given to those who build houses when it comes to optional zoning and opportunities.

"Because, if we are going to go into the situation that people see Cork as a speculative scenario — and this has happened in Dublin recently — we cannot have the situation where people are going to buy land, get zoning and then sell it on to us. That means we’d be charging more for housing than we should.

“It’s all about the cost base. Unfortunately we didn’t get VAT and things dealt with but at least if we can get a supply of land here at a reasonable rate we can sell houses more cheaply.

"And I would ask the council and the councillors and the executive here to give special attention to those who actually build houses as distinct from from those who’d add value onto land.”

CEO Tim Lucey said the council had a good interaction with builders through the Cork Development Forum, and with the CIF, agreeing “we don’t want to get to a situation in Cork where the purchase of lands from a development perspective are held and held and sat and sat,” but he admitted the Council couldn’t control the market in land sales.

However, Mr Lucey added “if people who have land and want to build houses, and if they are capable of being served and if they are not outrageous in terms of where they are located and if we think we can get them through the planning permission I think can assure you that that will be the mantra from Cork County Council.”

Meanwhile, development land sales in the third quarter of 2016 in Cork reached €27 million, up from €18m from the same Q3 period in 2015 but activity was “moderately down compared to previous quarters,” according to a survey published by Cushman and Wakefield.

Nationally, development land sales to the end of September amounted to €485 million, across 136 sites in the Greater Dublin Area (which accounted for €450m in sales, across 99 sites), as well as in Cork, Galway and Limerick.

This was up from to €395 million across 100 sites in the same period for 2015 “representing positive growth, both in terms of the value and volume of sites sold,” said the Cushman and Wakefield study, adding the ‘sale agreed’ pipeline was also strong for the four cities, at over €250 million to end Q3.

“It is worth noting that the performance of the development land market in Cork, Galway and Limerick this year has continued to be hampered by limited supply, while demand for prime residential land in particular has continued to strengthen,” said Rory Breen of Cushman Wakefield, stating “the supply of large scale residential and commercial land for sale remains a key challenge in the market.

"In terms of Budget 2017, the effect on land pricing will be negligible, although it may bring some sites on the market by virtue of the improved capabilities of first-time buyers.”

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