A LOCAL auctioneer has called for the Government to introduce incentives for new homes to be built in affordable Dublin suburbs and surrounding counties.
Paul O’Brien of Property Partners O’Brien Swaine says increasing supply in affordable locations is the only way to tackle pent up demand in the housing market.
The first quarter of 2017 has already seen property prices rise sharply by almost five per cent and Mr O’Brien warns that the gap in values between urban areas and the regions will only continue to widen.
According to CSO figures just released only 8,800 new housing units were constructed nationally between 2011 and 2016.
The cost of a new three-bed home in Dublin starts at €300,000 while outside the capital prices start at €140,000 – with little or no availability in many areas.
Mr O’Brien believes more homes should be built in areas with the lowest values in Dublin to give first time buyers a chance.
He said: “An acute shortage of new homes still exists in many counties and this will continue to be the case for the foreseeable future.
“Simply waiting for values to return to a point where a profit can be made is an extremely negative approach and will deny many people the opportunity to remain in their locality.”
He said the Government needs to assess areas individually and identify locations where supply is unlikely to occur in the short to medium term.
He added: “The fact remains that despite a national increase of 10.7 per cent values in many areas still remain well below the cost of construction.”
The average cost of building a three-bed semi-detached house outside the capital starts at €200,000, yet its average value in 20 out of 26 counties is less than that.
In west Dublin there is little or no incentive to build, according to Mr O’Brien, who pointed out that the average value of a three-bed stands at €287,000 and would need to increase by 15 per cent to give developers an acceptable profit margin.
He added: “Surely everyone should have the opportunity to purchase a new home in their own locality. This is a fundamental right for all.”