Coveney promises significantly cheaper homes in Dublin

New houses costing in the region of €250,000 to €260,000 are expected to become available in the Dublin area as a result of Government initiatives, Minister for Housing Simon Coveney has said.

They are likely to be located initially in areas designated as strategic development zones (SDZs), such as Cherrywood in the southeast of the county and Adamstown in the west.

Mr Coveney said he expected they would be delivered once the Government’s housing policies take effect, including the Help to Buy package due to be announced in the budget in October. The package will provide financial assistance to first-time buyers and offer incentives to developers to build affordable homes.

The starting prices envisaged by the Minister would represent a significant drop in the cost of houses currently aimed at first-time buyers. Surveys have shown the average cost of building a three-bedroom semi-detached house in Dublin, including an 11 per cent profit margin, is currently €330,000.

Help to Buy

Mr Coveney defended the Help to Buy proposal, a key element of the Government’s housing action plan published on Tuesday. The proposal has been some criticised by some economists who claimed it would not address housing shortages and would only serve to increase house prices further.

He said it would make it easier for first-time buyers to get mortgages, as well as driving the supply of new homes for this section of the market. He believed it would act as a “tipping point” that would encourage the construction of new homes.

Areas designated as strategic developments zones are expected to be the focus of this housebuilding activity. The designated zones in Dublin are Adamstown, Clonburris-Balgaddy, Cherrywood, Hansfield, and the docklands in the city centre. Grangegorman, north of Dublin, is also an SDZ.

Other SDZs include Clonmagadden in Meath, Monard in Cork and the north quays in Waterford.

Speaking on The Irish Times Inside Politics podcast, the Minister said there was a gap between what first-time buyers could afford and what builders could build houses for.

Budget package

“We have to close that gap by doing two things. One, we need to reduce the cost of building a house . . . and secondly we need to increase the capacity of first-time buyers to be able put the finance together to buy a home.”

The value of the budget package for first-time buyers is expected to be in the region of €10,000.

The housing action plan said a couple earning the average industrial wage could not afford to rent or buy a house costing more than €250,000. However, research by the Society of Chartered Surveyors and others has found “significant challenges” in delivering houses at prices below €300,000.

“I think we will be able to find a way to get houses built in Dublin for €250,000-€260,000 – that type of price range,” Mr Coveney said. “But whatever we do for first-time buyers, it must drive supply.

The Government has rejected a Fianna Fáil Bill to increase the number of local authority houses sold to tenants under a discounted purchase scheme.

The legislation, introduced in the Dáil yesterday, seeks to expand the scheme that allows local authority tenants to buy their houses at significant discounts of up to 60 per cent.