Thursday, 1 December 2022
Ceisteanna Eile - Other Questions
8. To ask the Minister for Housing, Planning, and Local Government the percentage rate at which new housing starts are reducing; the steps his Department is taking to tackle the problem; and if he will make a statement on the matter. [58972/22]
44. To ask the Minister for Housing, Planning, and Local Government the measures that have been taken to counteract the decline in housing commencements; and if he will make a statement on the matter. [58931/22]
I am not looking to ask this particular question in a combative manner because there is a crisis and the Minister has an interest in trying to fix it, but I still believe we are not focusing on the builder-level reason homes are not being built. When I talk to dozens of builders in my constituency, they tell me they are not building and they have not built in years. We have to get to the reason builders are not building in a housing crisis.
On the Croí Cónaithe initiative, for the record there are nearly 500 applicants in already and many of them are processed. I am not sure what date that question response went up to. I welcome the Deputy's question. As the Deputy will be aware, Deputy Bruton has asked a similar question.
Housing for All, which is the Government's plan, has been debated in the House and people will be aware of it. It is to increase the supply of housing to an average of 33,000 per annum - we will need to exceed that - over the next decade. More than 300,000 new homes will be built under this plan by 2030, including 90,000 new social homes, at least 36,000 affordable purchase homes, and 18,000 cost rental. Housing for All supply is key to improving our housing system. Thankfully, that supply is increasing this year. We set a target of 24,600 this year. We will exceed that quite substantially. It is important people are aware of that.
There were 26,600 units commenced in the year to October 2022. That is a 14% decrease on the same period last year when 30,947 units were commenced. Notwithstanding that, an uplift in supply is forecast for 2023 and 2024 relative to 2021 and we are on track, as I said, to exceed our housing target for this year. While that is positive, we have to acknowledge that issues have emerged over recent months, including those arising from the war in Ukraine, the unprecedented inflationary pressures and rising interest rates. These are having an impact on the momentum of home delivery, as reflected in those commencement figures to which the Deputy referred. We are responding to these challenges. On 2 November, we published the first annual update of Housing for All. The update focuses on what we can effectively do to fill that gap. It focuses on priority measures which will improve viability and accelerate supply.
The point the Deputy makes about how to get the smaller and medium-sized builders back in building is a valid one. I would not understate the importance in Housing for All of the State putting in more than €4.5 billion. We need €12 billion a year to deliver the homes we need, but it gives certainty in the sector that the State is the largest single actor in that market. We are such through measures such as the extension of the LDA's Project Tosaigh, the Croí Cónaithe cities initiative, the very significant increase in the subvention under the Affordable Housing Act 2021, which was sought by local authorities and which we have provided, and the recent increase in changes we made to the cost rental loan for approved housing bodies, AHBs, which will further improve that viability. That is helping drive the additional supply we need. These are some of the shorter term actions being undertaken now to provide State support and stimulate home delivery, which has been delayed due to inflationary pressures.
Other positive indications worth noting are, as I have said on many occasions, that the Government believes in the delivery of social homes at a scale we have not seen in decades. We believe in homeownership too. We believe in helping people to buy their own homes. We have the highest level of first-time buyers in the market since 2007, with more than 16,240 homes purchased in the year to the end of September. They are purchasing over 50% of new-build properties.
To answer the Deputy's question, the shorter term measures we looked at around Project Tosaigh, increasing the subvention under the affordable housing fund and accelerating social housing delivery are clear indications to the sector that the State is responding to those inflationary pressures.
There is also the work done by the Minister, Deputy McGrath, on the inflation framework to ensure that many sites that may have stopped because of rising costs did not stop and are continuing with housing delivery. I will come back with a supplementary response.
With all the figures, plans and language, if we are to boil this down we have record house prices, record rents and record homelessness. We are at the worst point so far of the housing crisis over the past ten years. Last year the Government missed its target by 5,000. It had a target of 28,000 builds and it built 23,000. This year's target is smaller than last year's target of 28,000 builds. We now have a situation whereby the number of commencements, which are the likely houses for the coming years, is down. We are in a very scary place. The pressure coming on the system is absolutely horrendous as a result of everything going in the wrong direction on this. We need to get to a situation whereby small builders throughout the country can build. They cannot build under the current system of inflation as the Minister mentioned. I suggest that we reduce the taxation that exists in the construction industry and allow to mitigate against the cost. We should reduce the size of the contracts being offered by the Government at present. In recent times Sisk obtained the contract for the foundations of the new modular homes being built. It is contacting builders at present to subcontract the work. These are builders who should have been able to pitch for these contracts on a smaller scale. This creates a layer of costs in the system that is of no benefit to citizens.
I have been in all of the 31 local authority areas throughout the country. Let us not catastrophise this with regard to supply. The Deputy cannot just take one figure and say everything is going in a downward trajectory. It is not. We are aware of the challenges which, by the way, are not unique to Ireland. There are the rising cost of funding and inflationary pressures. We saw positive news yesterday on eurozone inflation and Ireland's inflation rate is below this. This is because we have a strong and robust economy with near full employment.
We do have serious challenges in housing and there is no question about this. Housing for All is just over one year old. The first target we set under Housing for All was 24,600 for this year and we will exceed it substantially. I look forward to all Deputies welcoming the fact that supply is increasing. We will deliver more new social homes this year than we have done in decades. This includes affordable homes for the first time in the Deputy's constituency of Meath West. I have been in Meath and I have seen developments being carried out by smaller builders. We absolutely want them involved also. There is no question about that. Housing for All allows this to happen. The modular home delivery for our friends from Ukraine is being managed separately as a specific item. We will be looking at new modern methods of construction and fast tracking planning, and I look forward to the Deputy's support on this, to deliver an additional number of social homes above and beyond the targets we have set for next year.
The key issue is that a construction company in Navan that was building for the council went bust very recently. We need to know why builders cannot build and make a profit. They are scared of the risk that exists in the market and, therefore, they are not getting involved in it. The costs are not being mitigated at some level by the Government, such as through a reduction of taxation on building materials. We need accessible contracts for which smaller builders can tender. We also need to get rid of some of the bureaucratic red tape that exists at local authority level. Until we do all of this we will not get to a situation where homes will be built. Everything else is by the by. Everything else is missing the point completely. If a builder cannot build a house for a profit and take on the risk houses will not be built. This is the case for the majority of small builders in the country today.
I am responding to what you said. I fully respect the Deputy's right have a point of view. There are issues in Ireland and throughout Europe and there is no question about this. In Deputy Tóibín's home town of Navan how many homes are being built at present and how many homes are being planned? Look at what is happening in Meath West and throughout the country. Of course there are challenges to make sure we have small and medium builders involved in housing. I see this throughout the country. It is happening. It is not just the top three or four that are building. Housing for All gives us the ability. It is not a ten-year-old plan. It is about 14 or 15 months old. It is bringing about the planning changes we need to reduce costs and design changes to reduce costs and affordability measures. This year we have people for the first time in a generation buying affordable homes. This is because of the Affordable Housing Act the Government brought forward. It was not supported by many Deputies on the other side of the House. I recognise the issues the Deputy has raised. We are acutely conscious of them. We work with builders throughout the country to deliver the supplies we need. We need to get above the 33,000 average.
Something that must be addressed, and is being addressed, is the question of a skills shortages. We are short approximately 20,000 workers with the appropriate skills to build the more than 33,000 houses we want. In this respect the new centre in Drogheda for training apprentices with a €4.5 million investment will see 400 apprentices going through it over the next 12 months. This is the future. On the question the Deputy asked, there are other issues that have to be addressed also.
The Minister Deputy Harris has done an excellent job on apprenticeships. Thankfully we are seeing a substantial increase in the number of people registering for apprenticeships. We need to value trades and we need to value the work. We had changes last year whereby apprenticeships are now alongside the CAO and CAS offers. Deputy O'Dowd is right. We need to keep increasing the number of young women and men coming into the construction sector and learning trades to deliver the infrastructure that we need. They are good jobs with great prospects for career development.