THERE NEEDS TO be a major increase in the number of large-scale apartment blocks being developed in Dublin city centre to help ease the housing crisis.
That’s according to property agent Lisney, which also said that the capital needs much more office space to cope with the expected demand from companies looking to set up operations here.
In its review of the year and predictions for 2018, the company noted a report from the Chartered Surveyors Ireland (SCSI) published in October.
The study found that a developer needs to sell medium-rise apartments in the city centre for €470,000 to make their money back on a project, out of the price range of many would-be customers.
Lisney said that the SCSI study “illustrated that it is still not commercially viable to build apartments in most parts of Dublin”.
Cost of building
“This is due to the high cost of construction, namely VAT, levies and other soft costs, while the time-consuming planning system and a scarcity of affordable development finance are also holding back on-site commencements,” it said.
“It is vital to Dublin’s housing market and the economy generally that a dramatic increase in the construction of large-scale apartment developments is undertaken, ideally next to transport hubs.”
It pointed to proposed new regulations as reasons for optimism.
The draft guidelines, which were published by the Department of Housing last month, will likely remove the requirement for a car park per apartment when the development is located near public transport.
They will also increase the permitted number of units per floor in any development and introduce new provisions for studio-type accommodation.
“This is very positive because Dublin has seen only a handful of such schemes newly constructed,” Lisney said.
“These guidelines will reduce the cost of construction and, in turn, we believe more schemes specifically built for the rental market will commence.”
The property group also said that more new office space needs to come on-stream in Dublin city centre to meet anticipated demand.
“With demand for office space at an all-time high, vacancy rates, which are a key benchmark of the health of the commercial property sector, are now running at a headline rate of 8.7% in Dublin and 6.9% in the city centre,” Lisney said.
“Vacancy rates this low have not been seen since 2000. (This) ferocious appetite from overseas occupiers coupled with the low level of completions is putting indigenous Irish businesses looking to rent space in the city under pressure.”