The ‘Housing for All’ scheme is the Government’s new housing plan for 2030.
This new housing scheme aims to increase the supply of housing by an average of 33,000 new homes per year and eradicate homelessness in Ireland.
This figure is based on research by The Economic and Social Research Institute (ESRI) estimating that 33,000 new homes are needed each year to keep up with the current demand.
How will the Housing for All Plan work?
The plan promises 300,000 news homes by the end of the next decade. To that end, the Government have pledged to spend €4 billion annually to build these new homes.
The plan will include a mix of social, affordable, and private housing for sale and for rent.
What type of housing will this include?
- 90,000 social homes
- 54,000 ‘cost rental’ and affordable purchase homes
- 156,000 private homes
First Time Buyers
The plan also includes two affordable housing schemes for first-time buyers.
Prices for qualifying homes will be capped at €225,000 in rural areas, or up to €450,000 in the most expensive parts of Dublin. Up to 20 per cent of the cost will be covered by the State, or up to 30 per cent if no Help to Buy scheme was availed of.
Although this sounds great, there are obvious limitations and conditions. The extending of the Help to Buy Scheme is yet to be decided in the new Budget.
A different local authority-led Affordable Purchase scheme will cover affordable homes costing up to €250,000.
Where is the Government going to get this land to build on?
During a 2018 audit, the state discovered there is publicly owned land with the capacity to build 50,000 dwellings. Over the last three years, only a small fraction of this land has been used.
Local authorities will be tasked with building high levels of homes on these lands. However, to reach its target, the government should have started the long 18 month four-stage planning process last year. Furthermore, this land only covers a fraction of what is needed.
The question remains, where will the rest of the land come from?
The government’s answer to this is a plan to introduce new incentives to encourage home building in suitable locations and bring in targeted taxes to galvanize the greater use of zoned land and vacant properties.
A huge reliance will also be placed on the private sector to co-ordinate the development of lands and build 156,000 new homes.
Is the target achievable?
Experts have voiced their concern that the Housing for All plan’s targets are close to impossible to achieve. It is suggested that one of the biggest issues with the plan is that it targets supply rather than affordability.
In the last quarter of this year alone, asking prices for Irish homes have risen by 9%, according to a recent property report by MyHome.ie. The market is officially starved of supply and homebuyers are aggressively bidding on available stock which drives the prices up further.
According to the MyHome.ie report, asking prices have risen by 7.3% in Dublin and by 10.1% elsewhere around the country.
This means that the asking price for new sales nationally is now €308,000, while the price in Dublin is €414,000 and elsewhere around the country it is €260,000.
The findings of the report leave little to the imagination – houses are being settled well above asking prices. And the trend is set to continue with a future forecast of inflation set to raise to 10% by the end of 2021.
There are currently only 13,500 properties listed for sale on MyHome.ie, which is still well below the 20,000 homes on the market pre-pandemic.
The property market is overheating and the issue with supply versus demand will continue until we address the housing shortages.
Now it’s time to ask yourself – do I buy now before the market inflates any further?
Looking to get into the market? Apply Online today!
