CONOR O’DONOVAN introduces the Society’s new research into future housing supply capacity in Dublin.

Layout 1The SCSI has publicly expressed concern at the pace of property price increases – up 24% year on year in Dublin and 16.3% nationally according to the latest figures from the Central Statistics Office (CSO) – which is mainly being driven by a shortage of supply in certain areas. The construction of residential units has plummeted from an unsustainable level of 89,000 in 2008 to just 8,301 in 2013 and, until this year, there has been very little data available to project the number of units we will need to build on an annual basis.

New research
In April 2014, the Housing Agency published a new report – ‘Housing Supply Requirements in Ireland’s Urban Settlements 2014-18′. The report, which looked at demand for houses, assessed 272 urban settlements and identified a total required supply of 79,660 residential units across these areas to support the population between 2014 and 2018, an average equivalent of 15,932 units per annum over the five-year period. The per annum requirement across all these settlements ranges from 9,526 units in 2014 to 20,853 units in 2018.

With this in mind, the SCSI, through its Residential Agency and Planning & Development professional groups, decided to undertake a study into the available capacity to meet the required supply identified by the Housing Agency. It was decided that, as Dublin was experiencing the fastest price increases, and was most acutely affected by a lack of supply, the study should focus on Dublin, with a view to extending to other cities in 2015. Since the availability of supply from the second home market has been largely constrained by a variety of factors, it was decided that the report would investigate the capacity of the new homes market to meet the required demand.

The SCSI partnered with Future Analytics, the research company that produced the Housing Agency report, to provide data on the other side of the housing equation. SCSI commissioned a study to investigate the capacity in Dublin to increase supply to required levels based on residential zoned
land and existing planning permissions.

The study explored the capacity of lands zoned for residential development within the Dublin Region (comprising the four Dublin local authorities of South Dublin County Council, Dublin City Council, Fingal County Council, and Dun-Laoghaire Rathdown County Council) to deliver the requisite housing units for the projected population of the Dublin Region between 2014 and 2018, and considered this alongside the quantum of granted (extant) planning permission for residential development.

Zoning analysis – Dublin Region zonings
The Dublin Region has a total land area of c. 92,000ha and accounts for just 1.35% of the land area of the Republic of Ireland. Some 70% of this land (65,000ha) is zoned for Open Space and Amenity or Rural/Agricultural lands. Existing residentially developed areas occupy c. 17,600ha or 19% of the total land area of the Dublin Region. This land area accommodates 529,312 dwellings across the four Dublin local authority areas and a resident population of 1,242,620 persons (CSO, 2011).

Lands zoned for residential development
The assessment highlights that there are 2,233ha of land zoned and potentially available for residential development in the Dublin Region over the relevant Development Plan periods and beyond. A significant quantum of this undeveloped residential land is located within Fingal, with much lower figures in each of the other three local authority areas (Figures 1 and 2). This study assesses the capacity of urban settlements across the Dublin Region to support future residential development up to 2018. According to ‘Housing Supply Requirements in Ireland’s Urban Settlements 2014-2018’, the total population in these urban settlements is expected to increase from 1,242,620 in 2011 to 1,286,462 by 2018. Accordingly, at a minimum, these settlements will need to accommodate an increase in population of some 43,842 persons over this period.

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FIGURE 1: Total lands zoned for residential development in the Dublin Region.

 

 

 

 

 

 

 

 

 

 

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FIGURE 2: Lands zoned and potentially available for residential development in the Dublin Region.

 

 

 

 

 

 

 

 

 

 

Planning permissions analysis
The planning permission analysis shows the level of granted planning permissions by local authority area (Figure 3).

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FIGURE 3: Level of granted planning permissions by local authority area.

 

 

 

 

 

 

 

 

 

 

Supply requirement versus available capacity shortfall
The study has projected that there will be a minimum requirement for 35,433 units in Dublin over the next five years. There is, however, planning permission for 26,580 units, which represents an overall shortfall of around 25% (Figure 4).

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FIGURE 4: Capacity shortfall per local authority area.

 

 

 

 

 

 

 

The capacity shortfall may have serious consequences for the supply of housing in Dublin. The Government’s Construction 2020 strategy, which includes 75 measures to restore the construction sector to a more sustainable level of output, must now be implemented to ensure that the supply deficits are addressed as a matter of urgency.

SCSI hosts briefing
The SCSI hosted a housing supply breakfast briefing for members and external stakeholders from Government, which featured a series of presentations on the housing supply issue and potential solutions in advance of the Budget. The Society also launched a new planning permission and zoned land online viewer app as part of the project.

SCSI policy brief

Society hosts housing supply briefing
The Society of Chartered Surveyors Ireland held a breakfast briefing in advance of Budget 2014 for members and external stakeholders to discuss the key issues affecting housing supply from an economic, planning, demand and regulatory perspective. The event, which was a new initiative by the Society, took place at Chartered Accountants Ireland House, and was attended by over 100 members and external stakeholders from Government departments, financial institutions, housing associations and the media.
The briefing included presentations from Ronan Lyons of Trinity College Dublin, David Silke of the Housing Agency, Niall Cussen of the Department of Environment, Community & Local Government, and William Hynes of Future Analytics, and was chaired by the SCSI’s Conor O’Donovan. The new SCSI Housing Supply Capacity in Dublin’s Urban Settlements 2014-2018 report and the new SCSI online planning permission and zoning viewer were launched at the briefing.

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At the Society’s housing supply breakfast briefing, were (from left): William Hynes, MD, Future Analytics; Niall Cussen, Senior Planner, DECLG; Ronan Lyons, Assistant Professor of Economics, Trinity College Dublin; David Silke, Director of Research, The Housing Agency; and, Conor O’Donovan, Policy & Communications Director, SCSI.

 

 

 

 

 

 

 

 

 

 

 

EU Mortgage Credit Directive
The Valuation Professional Group of the Society made a submission to the Department of Finance and attended a stakeholder meeting in relation to the transposition of the EU Mortgage Credit Directive, where it highlighted the importance of valuation standards, the Red Book and Valuer Registration in Ireland.

Budget 2015
The SCSI had a series of engagements with Government departments in the run up to Budget 2015 arising from the SCSI Pre-Budget Submission and 10 Step Strategy to Address the Housing Supply Shortage. The SCSI was pleased to see some of its recommendations, including the finance fund for builders, the abolition of the windfall tax, the extension of the Home Renovation Incentive to the private rented sector, and the extension of Living Cities and taxation measures to improve land mobility introduced in the Budget.

Central Bank macro-prudential policy for mortgage lending
The Society has made a submission to the Central Bank under its Macro-Prudential Policy for Residential Mortgage Lending proposals to restrict loan to value (LTV) and loan-to-income (LTI) ratios. The proposed measures will require banks to restrict lending for primary property purchases above 80% LTV to no more than 15% of the total lent and to restrict lending to 3.5 times income for home purchases, which can be no more than 20% of the total.

EU Directive on Procurement
The procurement subcommittee of the Quantity Surveying Professional Group made a submission under the EU Directive on Procurement consultation. The submission contained a range of recommendations from the subcommittee, which was informed by the recent SCSI Public Procurement survey.

For a full list of submissions by the SCSI, please visit www.scsi.ie.

ConorO'Donovan Conor O’Donovan, MBA
Conor is Director of Policy and
Communications for the SCSI.