Oireachtas Joint and Select Committees
Wednesday, 22 July 2015
Committee of Inquiry into the Banking Crisis
Nexus Phase
Mr. Michael O'Flynn:
Because the banks have had such a difficult time with property, I can understand their reluctance to go near anything with, where there's ... more speculative nature than they need to. The reality of the situation is that you have to create buildings before you get tenants. Buildings aren't going ... people aren't going to come from, you know, faraway places in the world and wait two years. You have to have, I've known in places that we've developed in Cork, we've done a lot of work with the IDA over the years and they've done phenomenal work, but they needed buildings. They need buildings. I go back to the time when they used to ... advance factory rentals because otherwise we couldn't fund it. We're back to those days again but, to answer your question, we need to identify how many houses do we need and where do we need them. We need to put infrastructure where those houses, and you know I ... I've been involved with lots of meetings on behalf of Property Industry Ireland, even recently with various Departments ... in Dublin and recently with the Cork development forum. I'm really worried about the fact that there's scarce money to go around, we're not putting it where development is urgently needed to supply the housing numbers and the offices and factories that are needed. So you have to identify first: what's the market need, where is the need, you can't give some, a bit to everyone everywhere in the country and you have to supply it at a cost that works. Unfortunately, some of the costs associated with development today, the cost of funding is one of those costs. I think the development ... the banks are going as far as they can go. I think there's only a certain amount of equity around, a lot of the equity was easy to get for investment properties. It's more difficult for, for development ... I know that more than anybody else as, as well as anybody else knows that. So, I think we've challenges there in the cost of funding, we've challenges on the costs associated with planning, development levies and some of the regulations.
No comments