Lotus Investment sees housing supply rising to 20,000 this year

Lotus Investment, the Dublin-based construction financier, says the supply of housing units in Ireland could hit 20,000 this year, which is ahead of the Government's target.

Minister for Housing Simon Coveney is targeting an annual build of around 18,000 units this year, rising to 25,000 in 2018.

While this is still short of demand, estimated to be in the region of 30,000-40,000, it may slow current pick-up house price inflation, which rose to 10.5 per cent in May.

Lotus said it had now invested more than €200 million in property-related projects in Ireland, which will have delivered 1,100 new housing units by the end of June.

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The non-bank lender specifically targets developers who are completing “ghost estates” or building new developments in the commuter belt counties outside the main cities, where there is an overspill of demand.

The group, which also help clients to exit loan book sales, said it had recorded a 30 per cent hike in lending since the beginning of 2017 amid the current pick-up in construction.

Vacuum

Lotus also announced that it had raised an additional €150 million for further investment in the Irish market.

The group's head of business development Ian Lawlor said it has became evident that there is a vacuum as banks are increasingly unable to meet the needs of the construction sector.

"The Construction Industry Federation (CIF) have been rightly vocal on this issue and companies like Lotus are filling the demand," he said.

Lotus believes that non-bank lending will fund more housing completions than the traditional banking sector in 2017.

“The potential in the Irish market is vast and the Lotus numbers prove that non-bank lending is here to stay and we expect it to continue to grow rapidly,” Mr Lawlor, noting the company’s client builders have completed some 47 housing developments across nine counties.

“To date in 2017 we have offered terms on a further 55 projects,” he added. On the 30 per cent pick-up in new lending, he said: “We believe that this figure is a good barometer of the increase in residential housing supply in the pipeline this year.”