Chief executive of Hines Ireland Brian Moran didn’t mince his words when he said buying a home in Ireland was now solely the preserve of top income earners. He didn’t beat around the bush in identifying the cause of this affordability problem either: building standards and regulations.
“Given the production costs, particularly for high-density development, it’s only the top three income groups, possibly the fourth with Help to Buy [the Government’s subsidy scheme for first-time buyers], who can afford to buy,” he told the Dublin Economic Workshop’s annual event in Wexford.
How will the Apple tax ruling affect Ireland’s relationship with other multinationals?
“It’s not the market driving the price, it’s because the cost of production of modern houses is at a level that doesn’t work for their salaries [those below the top income deciles],” he said.
Northern Ireland, for instance, has decided to have lower space standards, lower build quality and no VAT “so they end up with something that costs €496,000 in Dublin costing €300,000 in Belfast”, Moran said.
“Other countries have similarly prioritised affordability over space and quality; we’ve decided on a particular standard and I’m not suggesting we cut our standards but I think we’ve sleepwalked into a situation without thinking of the cost implication of having great space standards and high-quality building.”
Is it that we’ve moved from a period of too little or no regulation to a period of too much? Has the pendulum swung too far? That’s what the industry is telling us.
Yet Moran’s comments come as the Government readies a new grant scheme of up to €2.5 billion to fix Celtic Tiger-era apartment blocks. It has been estimated that between 62,500 and 100,000 apartments or duplexes built between 1991 and 2013 may be affected by fire safety, structural safety or water ingress defects. The overall cost of fixing the defects has been estimated at between €1.56 billion and €2.5 billion.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
