Only 4,000 housing units under construction in capital
The situation in the capital has prompted fears that developers are sitting on land to instead build office blocks and multiply their profits.
Housing Minister Simon Coveney confirmed yesterday that there is planning permission for some 27,000 housing units in place in Dublin, but only 4,000 are being built.
The minister has in recent months introduced incentives to build or buy, including speeding up the planning process and offering grants to first-time buyers.
But house prices and rents in the capital continue to spiral, while the level of demand far outstrips supply.
Answering questions on housing in the Dáil yesterday, Mr Coveney said Dublin had seen “extraordinary” commercial or office development. Rents for such offices here were on a par with major capitals in Europe, he said.
He agreed commercial development was more attractive for developers, but that the Government was trying to ensure the “viability of residential” building improved.
But Independent TD Stephen Donnelly pushed for a special report on what he called a “crowding out” of residential developments.
The Wicklow TD suggested that developers were hoarding sites as they can get “five times more money” from office than residential building in Dublin.
“At the moment in Dublin, the analysis of the commercial property market shows us that we are dealing with a bubble in commercial property that exceeds the bubble we saw in 2006 and 2007.
“There is all manner of downsides to this. There are very few winners. The only winners are some foreign landlords and even they will become losers if and when the bubble bursts.”
Profits for commercial developments were vastly above those from residential, added Mr Donnelly.
He said that if a new property bubble was being added to by this situation, it was part of the problem that needed to be addressed.
Mr Coveney responded that he was not sure if reducing the momentum on the commercial side would result in increased building on the residential side.
Meanwhile, the minister said that rent caps could be introduced soon in 15 new areas. Rent increases were capped at 4% a year in Dublin City and Cork City at the end of 2016.
The Government has promised to extend these caps to other counties and areas.
The minister last night said many other new areas could have rent caps introduced in the coming weeks.
