Ireland unlikely to build 60,000 homes a year without surge in apartments, Cairn warns

Ireland has “little chance” of scaling up annual home completions up to 60,000 unless half of all units built each year are apartments, which developers face significant challenges to deliver, one of Ireland’s biggest homebuilders has said.Last year, the Government’s new housing plan set a goal of 300,000 new home completions by the end of 2030 to address the housing crisis. Meeting this target would require completions to rise from 36,284 last year to 50,000 to 60,000 annually. A submission by Cairn Homes to the Oireachtas housing committee has forecast close to 40,000 new homes will be built this year and completions in 2027 are “likely to further exceed that number”.The developer’s chief executive Michael Stanley said in a statement to the committee the building sector’s ability to grow annual completions to meet required demand could be hampered by national housing policy set by the Government.READ MOREStanley said the National Planning Framework (NPF), which has set the strategic direction where and what type of development takes place, mean the State can only deliver around 25,000 to 30,000 own-door houses a year, which means the remainder will need to be apartments.He added 85 per cent of zoned land has a density requirement that “necessitates some or all apartments within future developments”.“There is also an important climate and infrastructure rationale behind this approach. The 2023 Climate Action Plan includes a target to reduce total vehicle-kilometres driven by 20 per cent by 2030.”Last year, 12,047 of the 36,284 homes built were apartments, with 18,308 houses in new-build estates and the remaining 5,929 being one-off homes.“The biggest resulting change in housing output will be the requirement to massively increase large scale apartment output to meet land use stipulations,” Stanley said.“Approximately 50 per cent of all new homes in the future will have to be apartments to comply with the objectives of the NPF. This means that unless the industry builds c25,000 to 30,000 apartments per year, there is little chance of achieving a total output of 50,000 to 60,000 homes per year.”Research commissioned by the Department of Housing showed development costs for urban apartments in Dublin have rose by more than €13,000 to €605,000 last year, while the price of a suburban apartment rose by 2 per cent to €559,000. Developers have said the prices required to deliver apartments, and the lack of a viable exit from selling to individual owners or investors, has made many apartment projects unviable to build.Stanley said the difficultly the industry faces making apartment schemes viable to build could impact the sector’s ability to scale homebuilding up to the rate required to meet the 300,000 goal.“With apartments forming part of the delivery sequence, a lack of a funding or viable exit for those apartments will have the knock-on effect of restricting or slowing down the delivery of houses and the wider development,” he said.He added the sector needs support from the State to make apartment delivery viable “while private capital remains more limited for this category of residential development”.The State has set up the Croí Cónaithe (Cities) scheme, which was launched in 2022 to bridge the gap between how much it costs developers to build an apartment and the price owner-occupiers can afford to pay for apartments.Cairn has sold more than 350 apartments that were built in its new Seven Mills development in Dublin 22 through this scheme at prices between €235,000 and €275,000 for one-bedroom units, while a 79.9sq m two-bedroom apartment costs circa €375,000.