The Sunday Independent newspaper is definitely the one to pick up this week. It carries the 2018 Rich List with details of the 250 wealthiest people in Ireland, or hold an Irish passports. Unsurprisingly, the consistently rising property prices over the past number of years in Ireland, but in Dublin particularly, has contributed to large jumps in income for those dependent on property. More than 20% of those listed acquired the bulk of their wealth through property and construction, in Ireland and abroad. Many of the others have increased their wealth through strategic property investments. It is interesting to see newcomers to the list coming mainly from technology and this reinforces proptech trends towards innovating or digitising traditional industries.
As always, please do let me know if I have missed out on any interesting property news by emailing email@example.com.
Alternative Housing Models
Samantha McCaughren and Philip Ryan have a lead story on the front page of the Sunday Independent today headed ‘AIB targets empty nesters to sell the family home’. The bank is apparently planning “a range of new financial initiatives to encourage empty nesters to downsize and so free up badly needed family homes“. This is a conversation that has been happening, particularly in Dublin, over the last number of years. The difficulty for homeowners who find themselves in this situation is the lack of alternatives locally. Looking at the South Dublin market we can see that there are no smaller homes or apartments in areas where downsizing is most in demand and where it would likely have an impact on the market. In my experience this is not a demographic that can be influenced by financial incentives. Homeowners are generally resolute in not wanting to move or frustrated by the lack of suitable accommodation available within their existing communities. This is quite a controversial topic as it might be perceived as giving one generation a heave sideways in favour of the next generation, however, this is not the reality. It is important that Ireland and the Irish marketplace offers flexible housing solutions that allow people to trade both up and down while staying within their community of family and friends. Draft guidelines for apartments published by the housing department last December will go a long way towards meeting the range of demands for next generation of buyers, irrespective of their stage in life or lifestyle choices.
The same newspaper also has an article this week headed ‘Retirement village plan to house rural OAPs: ministers back independent living initiative’. Regular readers here will have read about various initiatives to develop Ireland’s first dementia village and other forms of sheltered housing for older people in Ireland. It now looks likely that the state will fund such villages as an alternative or perhaps a precursor to traditional nursing homes. It will be interesting to see how this proposal put forward by Minister of the Elderly Jim Daly and Minister of State at the Department of Housing Damon English proceeds in 2018.
Other property news
- Construction of Dublin’s tallest office building is to get under way in the coming weeks following the sale of its development site to a European investment fund Tristan Capital Partners: https://amp-independent-ie.cdn.ampproject.org/c/s/amp.independent.ie/business/commercial-property/tristan-fund-buys-exo-development-36474392.html
- Facebook, Google, and LinkedIn are investing hundreds of millions in housing projects across North America: https://amp-businessinsider-com.cdn.ampproject.org/c/s/amp.businessinsider.com/tech-companies-housing-silicon-valley-2018-1
- Help-to-buy scheme leads to 50% rise in first-time buyers: New CSO figures indicate that the programme has boosted demand for housing: https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/business/economy/help-to-buy-scheme-leads-to-50-rise-in-first-time-buyers-1.3352549?mode=amp
- UCD €300m student housing scheme gets the go-ahead: University’s project is the first to be approved under new ‘fast-track’ planning process: https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/news/education/ucd-300m-student-housing-scheme-gets-the-go-ahead-1.3352512?mode=amp
- On page 6 of the Independent’s business section today, Fearghal O’Connor interviews Collen Construction’s boss Tommy Drumm, Who warns that “housing projects are unviable due to soaring land prices with signs of a new bubble“. Again, this is something I have written about over the past number of months. Homebuilders are struggling to access development sites, which are being hoarded by large international companies that bought during the crash or in the early days of recovery. Tommy Drumm is certainly not alone in his criticism of this. This is an interesting interview with plenty of industry insights and definitely worth a read.
- Gavin McLoughlin reports that Capitalflow has merged with BBF Capital Partners as it gears up to offer term loans and bridging finance to Irish property investors. Lending forecast for 2018 is at least €100 million.
- Roisin Burke in The SBP reports on a spat between Ballymore Properties and US President Donald Trump. Apparently Trump cancelled a planned trip to London in protest at property dealings, which saw the US sell their prime embassy site and move their embassy to a site perceived as inferior by the President. The new US Embassy in London was developed by Ballymore Properties, which also sold the site to the US government in 2008.
- Tom Lyons continues the saga of Walford, the Shrewsbury Road mansion “standing between developer Sean Dunne and an escape from bankruptcy“ on page 5 for those interested.
- In PostPlus, Barry J Whyte and Jack Horgan-Jones have an in-depth piece about the Housing Agency headed ‘A House Divided: The chairman of the Housing Agency says something raise our game on the system to get to the top of the housing list. His chief executive disagrees, and has said so publicly. What does the division mean for an agency that advice of the government on the housing crisis?‘ This refers to the ongoing criticism of Conor Skehan following his reappointment to the agency two weeks ago. Rather than rehash the media debate over the past few weeks, I will let interested people read this themselves. One point that I will repeatedly make is that we need public servants who speak out in the same way that we need industry leaders who speak out. We need them to talk about the unpopular and the unpalatable truths because we know that politicians are unable or unwilling to do this.
- All broadsheets today run the story of AIB bank calling for tax breaks for developers and landlords in order to tackle the housing crisis – it is the lead story in The Sunday Business Post. This is another controversial area that is seen by the industry as necessary, however, politicians are still unwilling to proceed with this, despite most recognising the commercial need for same. And I understand. The optics for incentivising developers are difficult to manage. But that is a political problem and Ireland needs housing solutions. We need bread policymakers who are willing to make unpopular decisions in order to get construction activity ramped up to the level needed to meet the commitments made by government. What we are likely to see are incentives by another name, for example the help-to-buy scheme is a supply initiative that was marketed as being for buyers. In reality, it is a developer initiative and a very important one that the market cannot do without. In fact, stories like this serves to highlight why housing cannot be a political issue. Let’s hope 2018 is the year that policymakers do what is right in the long term rather than what is popular or palatable in the short term, starting with a VAT reduction for the construction industry.
- Over 370 vacant homes bought for social housing: Spend of €67m on 260 houses, 114 apartments under Rebuilding Ireland scheme: https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/news/social-affairs/over-370-vacant-homes-bought-for-social-housing-1.3349999?mode=amp
- Lidl was given the go-ahead from Kildare County Council for a new state of the art distribution centre in Newbridge, County Kildare. At over 54,000m2 the distribution hub will be one of the largest building projects in Ireland in 2018 and when complete, will employ a workforce of over 350 including 100 newly created positions. The development includes the construction of a significant stretch of new public road, which will form the first part of the long-awaited Newbridge bypass.
We have special group rates for any Irish innovators, investors and construction/property professionals heading over to Future: Proptech 2018 in London this May: https://www.estateagenttoday.co.uk/breaking-news/2017/8/futureproptech-2018–conference-on-industry-technology-confirmed. Email firstname.lastname@example.org for rates.
To keep up-to-date on all things tech and innovation for the planning, construction and property industries, head over to http://www.prop-tech.ie, the national resource website for innovators, investors and mentors or email email@example.com .
Property Insiders Guide
As many of you might know, my annual property book The Irish Property Buyers’ Handbook (since 2011) has undergone a rebrand for 2018 and will now appear as part of The Property Insider series, published by Oak Tree Press, the first three titles are now published and available here.
On a personal note, thank you all for your continued support and best wishes for a successful New Year!
(Finally, as always, apologies for any typos, it’s difficult to get good help on a Sunday!)