DUBLIN (Reuters) – The number one issue Ireland faces in building more much-needed housing is implementing new planning rules rather than making it easier for homebuilders to access finance, Irish Central Bank Governor Gabriel Makhlouf said on Monday.
The number of homes built in Ireland last year fell 7% to just over 30,000 and the central bank forecast last week that the government will fall short of its targets over the next three years to rapidly increase supply towards 50,000 a year.
Makhlouf was responding to a report in the Irish Independent newspaper that the government wants developers to be able to borrow more money from banks to reverse what Ireland’s housing minister has described as a “collapse” in apartment building.
“The number one issue on housing is not financing. The number one issue on housing is planning; it’s absolutely planning. This is not a unique situation in Ireland but planning is the problem,” Makhlouf told reporters.
“Changing the law is one thing, making sure the new law is implemented well is as important. So I would put all my energies at whatever levels of government, whatever levels of industry, to making sure that the planning rules are being implemented in a way that supports the construction of housing.”
Makhlouf said Ireland’s banks are well capitalized and have the capacity to lend based on their own risk appetite.
Housing Minister James Browne said on Sunday that radical steps were needed to boost apartment building and that all potential measures, including the introduction of tax breaks for developers, had to be on the table.
Ireland has struggled to house a rapidly growing population since the construction industry melted down in the wake of a 2009 financial crash, with house prices surging 160% from a 2013 trough and rents roughly doubling in parts of the country.
The central bank warned last year that Ireland faced significant challenges to make construction more financially and practically viable to catch up on a decade of under-supply.
(Reporting by Padraic Halpin; Editing by Mark Potter)
