herald

Thursday 19 October 2017

Shortage of homes 'to last 4 more years'

IT will be another four years before there are enough homes in the country, the head of AIB has warned.

The massive shortage of family homes in Dublin is being blamed for a surge in asking prices, with the cost of buying a house in the capital rising about 25pc over the past year.

The warning from AIB chief executive David Duffy will increase fears among tenants and prospective buyers that the housing market could be years away from a return to any degree of normality.

At the same time, AIB is in talks with six developers about providing finance to build more than 5,000 homes in the greater Dublin area.

Mr Duffy said the bank could provide between €500m and €1bn a year, "depending on what gets off the ground and is approved".

"Some of it will be development finance, some of it in construction, some in mortgages - it's different categories of finance," he said.

AIB is in discussions with Dublin City Council regarding potential planning issues and said some developers have up to a dozen potential sites.

"There are six groups. It's early stages yet as they are all reacting to the Government's (new construction) strategy. We are happy to engage with them," he said.

Asked how quickly the houses will be built, he added: "It really depends on the developers and how quickly they can mobilise their resources.

"We would like to see significant traction in 2015."

Mr Duffy said AIB was also in talks with NAMA about potential opportunities to facilitate new housing.

Taoiseach Enda Kenny has insisted there is no new property bubble, but has admitted the cost of buying a home would continue to rise for up to two years as supply fails to meet growing demand.

hnews@herald.ie

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