Ms Jeanette Mair:

The Senator asked about apartment developments. There are a number of issues, which Mr. Parlon outlined, around some of the reasons the viability of apartment developments, particularly in the Dublin area, is fairly limited such as the building height, the number of lift cores per floor and issues around dual aspect. It is to be hoped the working group of the Minister, Deputy Eoghan Murphy, will examine that and come up with solutions to amend the 2015 guidelines for apartments. On the other hand, there is the investment side. With the change in the types of tenure among apartment dwellers within the city and across most urban centres in Europe and the world, an increasing focus on urbanisation and the requirement for a change of tenure, we are moving to a build-to-rent model.

Current providers of housing within the urban centres are largely focused on housing units, three-bedroomed developments and so on. Even where large developments of apartments are taking place, they are often being built by larger companies, and even where they are able to pre-sell some units, it is being done on a phased basis. One of the problems about getting the finance in place to undertake the significant site infrastructure works that are needed to begin to develop an apartment building of significance, say, within the city area, is that there are site restriction issues, accessibility, and all the site infrastructure works that have to take place. Developers have to put together a model which their lenders will support. Lenders which are currently in that space come from international sources largely and some international firms are operating in this area.

As Mr. Parlon mentioned, we have received large investment in commercial office space, the hotel sector and student accommodation. Unfortunately, there has not been the same appetite to invest in the residential sector, although it is changing. There is also the matter of the viability of being able to build units that a developer will know will be rented or possibly sold. Unfortunately, it is very difficult to pre-sell apartments. Even within housing developments, very liquid builders are only getting the finance to build ten or 20 houses at a time. They must have contracts signed and agreements in place before they will be given the next amount of development finance to proceed with the remainder of the phase in a development. That is the current environment, but obviously market demands will probably dictate that. We will slowly see a maturing sector within the construction industry moving into that space in time. It is to be hoped the amendment of the standards, if that is to happen by the end of the year as promised by the Minister and the Department, will go some way to aiding the build prospects and the viability of entering into that, which is quite a high-risk investment in the first place.