The housing crisis in Ireland is complicated – whether you’re a tenant, a prospective house buyer, a landlord or a homeowner considering selling. Here, we provide a breakdown of the facts and figures around it.
The most striking figure when discussing housing in the State is the number of people who are homeless. That number reached a new record level in January, after rising for the seventh consecutive month – with 11,754 people living in emergency accommodation at the start of this year, according to the most recent monthly figures from the Department of Housing.
That includes 1,609 families, with 3,431 children in homelessness. Fifty-five per cent of them are single parent families. Nearly two-thirds are Irish, 22 per cent are from the European Economic Area or the UK, with the remaining 17 per cent being from outside the EU.
Housing delivery and targets
The State has too few properties to rent. Taoiseach Leo Varadkar earlier this month put the shortage at 250,000. Houses, apartments and duplexes are being built and the pace of construction is increasing. Under Housing for All, the Government pledged to build an average of 33,000 new homes each year from 2021 to 2030.
That plan and estimate was devised before the influx of refugees and asylum seekers, however, meaning the need could now be significantly higher, particularly in the short to medium term.
In all, 29,851 residential units were completed in 2022, of which 9,148 were built in the final three months of the year, according to figures released by the Central Statistics Office (CSO) in January.
Of that, 9,166 were apartments, which is up almost 80 per cent compared with 2021. More than 10,000 were houses in housing estates of one form or another.
While the Government reached the target of new builds last year, it did not reach the target number of social housing.
The Department of Housing also was not able to use the full capital spending budget, carrying over €340 million, out of a total of €4 billion, to this year. The failure was blamed on supply issues and a shortage of builders.
For 2023, the Government’s target is 9,100 social homes, 5,500 affordable and cost-rental homes and 14,400 private ownership or rental homes. In all, that adds up to 29,000 new builds.
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For the last few years a shortage of supply has translated into rapidly rising prices, though there are some signs that the recent rate of property price growth is slowing.
According to the CSO’s most recent property price index, prices in the State fell for the first time in almost three years in January. This has been put down to the impact of higher interest rates and other cost-of-living pressures.
The index found that property prices fell on a monthly basis by 0.6 per cent, while the annual price increase fell to 6.1 per cent in January. This was down from 7.7 per cent in December and from a high of 15.1 per cent in February and March last year.
Year-on-year inflation in Dublin fell to just 4.3 per cent in January while on a monthly basis, prices were down by 1.1 per cent. Prices in the capital have been falling – on a monthly basis – since October.
The latest property data show households in the State paid a median price of €305,000 for a home in the 12 months to January. The Dublin region had the highest median price (€430,000) during that period.
Laws were introduced in a bid to speed up the supply of new housing, particularly to ease planning rules.
In 2017, the Strategic Housing Development (SHD) scheme came into effect, which allowed direct planning applications to go to An Bord Pleanála, the planning appeals authority, rather than through local councils.
The laws were heavily criticised, with many projects having faced judicial review actions in the court – and it did not speed up planning
That SHD system has been stood down, replaced by the Planning and Development (Amendment) (Large-Scale Residential Development) Act 2021.
The Act, subject to a number of transitional arrangements, seeks to remedy the flaws of past legislation for larger housing developments but, fundamentally, it puts the final call back in the hands of local authorities, not any super planning body.
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Supports available for purchasers
The problem remains that there are not enough houses for people to buy.
In light of this, the Government has tried to make it easier for first-time buyers, who are often priced out of the market.
The first is the Help-to-Buy scheme, which offers first-time buyers help with the deposit or help for those who are self-building. Under the scheme, purchasers who are tax compliant and who have a 70 per cent loan-to-value ratio can claim relief of up to a maximum of €30,000.
One of the newest schemes to be introduced is the shared equity scheme, which seeks to bridge the gap between an individual’s deposit and mortgage, and the price of their new home. Critics say it merely increases the cost of homes.
Under it, State and participating banks pay up to 30 per cent of the cost of a new home in return for a stake in the property.
Separately, the Local Authority Home Loan is a Government-backed mortgage for first-time buyers or fresh start applicants and is available nationwide from all local authorities for those on modest or low incomes.
Both new builds and second-hand homes are eligible, though single people must earn less than €70,000 to qualify, while couples must together earn less than €85,000.
Meanwhile, the Local Authority Affordable Purchase Scheme makes local authority-provided homes available at a reduced price for first-time buyers and fresh start applicants, whose combined mortgage and deposit will not cover the market price of the newly built home.
Through the scheme, the local authority will take a percentage equity stake or a share of the ownership in the home, which the purchaser can redeem or buy out, at a time of their choosing.
If the purchaser does not redeem the equity stake while living in the home, the local authority can do so when the property is sold or transferred or after the death of the owner.
Not everybody wants to, or is in a position to, buy a home, however. A large proportion of the Irish population are now reliant on the private rental sector, which has also seen rising prices in recent years.
According to the Residential Tenancies Board (RTB) rent index for the third quarter of 2022, the most recent figures available, rents in newly registered tenancies increased by 6.7 per cent when compared with the same period in the previous year.
The standardised average rent in new tenancies for houses stood at €1,468 a month, an annual increase of 6.8 per cent, the RTB said. For apartments, the standardised average rent in new tenancies stood at €1,513 a month, a rise of 6.7 per cent on the same time in 2021.
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Supports available for renters
For many, the increasing costs in the private rental market means that it is simply a challenge to pay rent, food, utilities and live. As a result, there are a number of State schemes available to assist those in that position.
The Housing Assistance Payment (HAP) is a social housing support for people who have a long-term housing need. It is available in all local authority areas and is administered by the councils, who pay the landlords directly.
Rent supplement is a means-tested payment for certain people living in private rented accommodation who cannot provide for the cost of their accommodation from their own resources.
It is short-term income support for people in the private rented sector, such as an individual affected by domestic violence or someone who has experienced a substantial change in circumstances which occurred after they started renting.
The Government has also recently rolled out a cost-rental scheme, which provides affordable rented accommodation to people on middle incomes.
It is aimed at people who are above the threshold for social housing but have difficulty affording private rented accommodation.
There are laws in place that seek to protect tenants, too. The Residential Tenancies Board (RTB) was established in 2004 to regulate the private rental sector.
Its main functions are to maintain a register of private residential tenancies, tenancies of approved housing bodies and student-specific accommodation tenancies, as well as provide a dispute resolution service for tenants and landlords.
There are also rent pressure zones (RPZs), which are designated areas in which annual rent increases are capped in line with the rate of general inflation or 2 per cent a year, whichever is lower.
Research published last year from the Economic and Social Research Institute , however, found that more than a third of landlords applied rent hikes over the allowable limit in RPZs while the legislation was in effect.
During the Covid-19 pandemic and again during the recent winter period, the Government introduced a temporary moratorium on evictions.
Under this, a landlord is unable to evict its tenants, so long as they are continuing to pay their rent owed.
The ban will expire at the end of March, which has sparked significant controversy among advocacy groups, Opposition politicians and even some Government TDs.
Ministers this week agreed to put in added protections once the ban lifts, such as an extended tenant-in-situ scheme, which is where a council can buy the property from the landlord to allow the tenant to remain in residence.
Government said there would be concerns around the constitutionality of a permanent ban, while extending the ban would see more small to medium landlords leaving the sector.
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A large proportion of recent eviction notices are because a landlord said they have an intention to sell the property, according to the RTB.
Research published by the board at the end of last year found a quarter of small landlords are likely or very likely to sell their rental properties in the next five years.
Small and medium landlords have been leaving the sector in recent years, with the RTB attributing this shift to accidental landlords, who were in negative equity after the financial crash, returning to a financial situation in which selling was an option.
On the other end of the spectrum, there are institutional landlords or private rented sector funds.
Described by a variety of names, including vulture funds or cuckoo funds, they are typically a hedge fund with institutional investors that buy up an entire block of apartments directly from the developer before they ever hit the open market.
According to the CSO, these vulture funds, local authorities and State-backed housing charities bought 13,500 homes last year, meaning one in five purchases of all residential properties is accounted for by these non-household entities.
Ires Reit, one of Ireland’s biggest private landlords, has a property portfolio of 3,938 units as of December 31st, at a value of €1.5 billion.
According to Ires Reit’s preliminary report for 2022, total revenue grew by 6.5 per cent to €84.9 million for the year. Occupancy rates also rose to 99.4 per cent.
Kennedy Wilson, meanwhile, has 2,530 units, though it has a 50 per cent stake in each scheme, as part of a joint venture with Axa.