Ladies and Gentlemen,
Thank you for being here today at the launch of the Government’s Strategy for the Construction Sector.
When we set out to develop this strategy, we were particularly conscious of four issues.
Firstly, that the recovery in the economy has been largely export-led. That is absolutely what we want to see, but to take recovery a stage further we need to see more activity in the domestic sector.
Secondly, that a very large number of people who are currently unemployed, previously worked in the construction sector.
There are some 43,000 people in this group, and some 80 per cent of them have been unemployed for more than one year;
Thirdly, that while the construction sector is operating well below capacity, by European standards, and while we want to see more activity and more employment, we don’t want to repeat the mistakes of the past.
And finally, that while getting the construction industry back to a normal level of activity is about jobs, it is also about homes. That people would be assured of a home – of a secure and safe place to live – should be the hallmark of a decent society, whether that home is privately owned, rented, or part of our social infrastructure.
So, the challenge we set ourselves was not just to get the construction sector moving, but develop a sustainable and well-regulated sector, that can be a source of good and stable employment in the years ahead, and that can provide a supply of homes for our people.
And because of that, we are conscious that we whatever strategy we produce, should not just be about kick-starting the industry at a point in time. If this strategy succeeds, as I hope it will, then the issues facing the sector will change over time.
If we think back only 12 months, then there was tentative evidence that the housing market was starting to level out, with prices beginning to stabilise. Today, we are seeing prices starting to increase, and strong evidence that rents are increasing. At one level, it could be argued that these are signs of a market that is recovering.
But, unless we put a structure around that recovery, that could easily be the start of journey down the same old road, that brought us into so many problems before. We do not want to see the start of another unsustainable price spiral, putting a modest family home beyond the reach of young couples. That is why, as a Government, we are actively working to shape that recovery, and to steer the industry in a new direction.
Of the issues facing us, the dearth of family homes for sale in Dublin is particularly acute, and one that we have to address.
There has been much debate about whether a housing bubble is emerging in Dublin. But the most pressing problem in Dublin is a mismatch between supply and demand. Last year, only 1,360 homes were completed in the capital – for a population of almost 1.3 million people.
The demand is there – now it has to be met with supply. It is my view, that the Irish Strategic Investment Fund can, and should, have an important role to play in providing equity for construction projects, including residential projects, to overcome the problem of financing new developments. Of course, that equity would have to have a commercial return for the taxpayer. The NTMA Amendment Bill, which will underpin the Strategic Investment Fund, will be published tomorrow, and the Minister for Finance will request the ISIF to consider such investment when it is up and running later this year.
But new housing development on its own is not enough – it has to be in the right place. That is why we are we are also putting in place a National Framework for Housing to ensure that we have accurate data on housing supply and housing need. And it is also we why we are setting up a Housing Supply Co-ordination Task Force for Dublin.
This will bring together the four local authorities and other agencies to make sure that everything possible is being done to ramp up the supply of houses for Dublin. That will involve co-ordination with what NAMA is doing, but also a site-by-site analysis of what might be holding back movement on any particular site.
Clearly, in a market where rents are rising there are particular issues for social housing.
In March, Minister Jan O’Sullivan announced a return to local authority house building with an allocation of €68m for priority needs.
One of the most obvious areas of concern, however, is the large number of local authority houses that are vacant. It is a source of some frustration that we would have people in need of housing on the one hand, and a large number of boarded-up homes on the other.
Last month, Minister O’Sullivan announced a fund of €15m to bring 952 vacant local authority homes back into use, and yesterday, Minister Howlin announced an allocation of a further €20 million for this purpose.
On top of these immediate measures, we are moving to develop a more comprehensive social housing strategy, which will set out a vision for the sector in the years ahead. Minister O’Sullivan will also be publishing a Homelessness Implementation Plan in the coming weeks.
As I said, I do not see the launch of this document as the end of our work – it is only the beginning.
It is taking us down the path to a more sustainable construction sector, which provides good sustainable employment, but which also provides the homes and the commercial property that our country needs.
Having a healthy construction sector is part of having a healthy, well-functioning economy, and I look forward to seeing this strategy being put into action.
Thank You.
ENDS