On the move
Home builders are back but expect a trickle of new homes, not a flood
The builders are back. Or at least they are where I live. The so-called breakfast roll brigade are back in action, queuing in the local shops and slowing down the traffic on the roads in their Caterpillars and dump trucks.
It’s a reminder of just how much has changed in the economy in the last six or so years – what was once just an everyday occurrence is now something to be noted.
But is the new development in our area an anomaly or is it a sign of a wider trend? Well, the statistics seem to back up the observation that new home building has commenced once more. According to the Construction Industry Federation, for example, in the first three months of the year, new housing starts jumped by almost 20 per cent, although it’s worth noting that this is from a particularly low base, with 965 units being built. Dublin saw the greatest increase, with 254 new starts in Q1, up from just 43 in 2012.
So where are they? And is there a move away from the high-density apartment developments of old?
In Stepaside, south Dublin, New Generation Homes is fast building a new development of two-, three- and four-bed homes, while it also has other developments on the go, including Westmanstown Cottages in Lucan, west Dublin, and Cherbury Mews in Knocklyon, which are due to launch shortly.
In the nearby Sandyford industrial estate, the National Asset Management Agency (Nama) is funding the completion of some of the Beacon South Quarter development, with construction now under way on 85 “contemporary” apartments, as well as 1486 sq m (16,000 sq ft) of commercial and community space.
And over on the northside of Dublin, Nama is also backing Gannon Homes to complete a scheme of three-bed family homes at Parkedge in Clongriffin.
But before you think that the days of billboards, glossy brochures and radio ads for new developments are back, it seems that the flow of new homes is more of a trickle rather than a flood.
Keith Lowe, chief executive of estate agent Douglas Newman Good, notes that there has been a gradual upturn in the capital.
“I do see an improvement in Dublin, but it’s not going to be vast,” he says.
A key issue for any new development of property is funding, and those that are in a position to fund a development at the moment – and take advantage of considerably lower construction costs – are likely doing so through their own funds.
“There is no development funding available anywhere,” notes Lowe.
The other source of funding is the taxpayer, through Nama. It has started funding partially completed developments, such as the aforementioned Beacon and Clongriffin developments, and is likely to continue to do so.
With so many vacant and ghost properties – the 2011 Census revealed that there were some 23,000 vacant apartments in the capital alone for example – it seems counter-intuitive to talk about new construction starting again.
But, as interest in Nama’s 80/20 scheme has shown, demand for new-builds in peripheral areas, which might currently be vacant, is limited. And this despite the protection the scheme offers against falling prices. Of the four developments available in Dublin for example, two are in north county Dublin, one in Dublin 24 and one in Dublin 18.
Indeed, since launching in May last year, about 160 properties – out of a total of 400 – have been sold through the scheme, at an average value of about €200,000.
So, given the numbers of people still in rental accomodation, who may potentially look to buy in the near future, if some new building of scale doesn’t start to recommence, it could ultimately put more pressure on prices as supply gets squeezed even further.
This is just an observation rather than a statistical insight, but after months spent complaining about the poor supply of family homes, it seems that there has been a welcome pre-summer boost for house hunters, with a flurry of new properties being listed.
It’s by no means an avalanche, but is a welcome upturn all the same. One agent I spoke to said he was encouraging people to put their properties on the market now as the market is relatively strong; perhaps the concern is that the much-touted repossessions coming onto the market later in the year will drive down prices.