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Tom Parlon, Director General, Construction Industry Federation (CIF), has said that while recent Government initiatives are having a positive effect on the housing sector, market failure in finance is affecting the industry’s ability to deliver on housing output targets.

Housebuilding viable again

“Recent Government initiatives are having a positive effect on housing supply in some sectors,” says Tom Parlon. “For example, the CSO’s recent figures validate our [CIF] submission to the effect that there was latent demand in the first-time buyer segment. This grant made housebuilding for this segment viable again, meaning banks were willing to lend to companies to build suitable houses. The reality of the post-recession economy is that few builders are in a position to fund the large housing developments required to address the housing crisis. In addition, regional housebuilders are not able to build the necessary housing outside the Greater Dublin Area as evidenced by the CSO’s finding that two-thirds of new house sales have been in Dublin, Meath and Kildare.

Market failure in finance

“The Government and its agencies such as ISIF, NAMA and the future HBFI must deliver innovative funding platforms to support housebuilding across the country,” he says. “There is a market failure in finance for housebuilding that is stymieing the Government’s plans to increase housing output.”

Tom Parlon says that the issue is that the many initiatives put in place by Minister Murphy and his predecessor take years “to wend through the political system and translate into activity in the ground.

Bureaucratic and political alignment

“What’s required is a bureaucratic and political alignment behind the existing policy initiatives that are working through the system. For example, the Homebuilding Finance Ireland agency should be fast-tracked through the political system. Lengthy procurement processes and planning issues have the potential to work.”

Tom Parlon welcomed many of the proposals outlined in Fianna Fáil’s housing strategy.

“The concept of an agency to set out and expedite 90,000 homes in the next three years is a positive step. Both the Government’s actions and FF’s proposed strategy must be assessed not on their output targets, rather on whether they can bring the vast bureaucracy of Government, Local Authorities and State Agencies together to work more effectively. Successive Government’s inability to do so has led to the housing crisis and will continue to dictate how successful we are in increasing supply in the future.”