Limerick Chamber recently released its Spring Economic Update for the Mid West. While the number of people in employment is positive (thankfully), the housing landscape of the Mid West is simply not where we need it to be.
Some of the high-level findings of Limerick Chamber’s report outline that there were just 21 residential homes to rent in Limerick City and Suburbs in April. Just five of these were one-beds and just eight were in apartment blocks. On top of that, the average rent for these homes in April was €1,677.
Thankfully, the rental landscape took a more positive turn in May with 48 residential homes available to rent, but just five were one-beds. However, the average price again in May was €1,600.
Additional savings for some households in 2020 and 2021 might have offered some sign of hope for prospective home purchasers but the average asking price for homes on Daft.ie increased by up to €40,000 across the Mid West over the same period – likely overshooting any additional savings by households and bringing many people back to square one.
Across the Mid-West in 2021, 1,331 houses were delivered – just 606 in Limerick, 410 in Clare and 315 in Tipperary.
But where does that fit in with housing need?
The Economic and Social Research Institute (ESRI) outlines an annual demand in Limerick alone of between 1,200 to 1,800 new homes per year. This represents a doubling or tripling of our existing housing output. Each year of missing this target adds more delivery needed in future years.
At a national level, Housing for All, the Government’s strategy for dealing with the housing crisis, estimates the need to provide 33,000 per year until 2030. While the National Asset Management Agency (NAMA) outline housing need could be as high as between 38,000 to 61,000 per year.
A recent report by leading consultancy firm EY forecasts just 25,000 home completions in 2022 rising to 27,000 and 32,000 in 2023 and 2024 respectively – likely signalling at least three more years of missing targets and adding to the pent-up demand already in the system.
The Mid West had a wealth of planning permission grants in the system in 2021, however, the key is activating these planning permissions and turning plans into bricks and mortar. The grant of planning permission is no guarantee that homes will be commenced. In 2021, the Mid West saw 2,834 homes granted planning permission, just 675 (23.8%) were apartments.
While an increase in housing delivery is welcome, and we have been trending upwards for the last number of years, it is imperative that it is the right type of housing.
In 2021, across Limerick, just 3 in every 10 new homes delivered went to owner occupiers, while the State accounted for 4 in every 10 with non-household purchasers picking up the rest. Not only are owner occupiers dealing with a chronically low supply of housing, they also only pick up about 30 per cent of what is actually delivered.
In terms of building homes designed to meet the needs of people, in 2021, for Limerick, 53 per cent of the main applicants on the social housing waiting list were under the age of 39. In Clare, 51 per cent of applicants were under 39. In Tipperary it rose to 54 per cent.
The vast majority of those on the social housing waiting list require smaller homes, with per cent of applicants in Limerick being a 1 adult and 1-2 child households. In Clare this is 77 per cent and in Tipperary it is per cent. This signals the need to directly build smaller social homes for smaller family units.
We need to build more homes for smaller families and single people within an existing urban footprint. The cost of construction of apartments does a lot to impede this and feeds into viability of building apartments outside Dublin.
The introduction of cost rental housing, where the cost of rent is equal to covering the cost of construction of the home over the lifetime of the loan, will go a long way in helping viability of apartments and houses for renters and it is a type of tenure that is up and running in the Greater Dublin Area. However, it must be implemented on a large scale and in a timely manner inside as well as outside Dublin.
