Smaller families, bigger houses and the homes we forgot

PROPERTY

Property insights by Johnny Gannon, Fair Deal Property

WALK down Bishop Street, the Dublin Road or any of the older streets of Tuam and you will see the answer to Ireland's housing crisis staring back at you. The humble terraced house.

These homes have sheltered families in this town for over a century. Yet in the private market we have almost completely stopped building them.

Consider how family life has changed. Fifty years ago, it was common for six children to be raised in a two-bedroom terrace and raised well.

Today the average Irish household has shrunk to fewer than three people, almost one in four households is a single person living alone, and many couples have one child or none. Families have halved in size while houses have doubled.

The evidence is stark. In recent large planning permissions, two-bedroom terraced houses made up as little as three per cent of units.

The two-bedroom homes that do get built are mostly Dublin apartments or social housing schemes, and fair play to the councils for that. But a young couple in Galway who want to buy a new two-bedroom house cannot. The units simply do not exist.

This is not the fault of developers. Up to now they built Ireland's default home, the three and four bed semi, because the market demanded it. But times are changing.

On the supply side, massive inflation in materials and labour has made that semi too expensive to build. The two-bed house today costs the same to build as the three-bed did just four years ago. Inflation has essentially eaten a bedroom.

On the demand side, our smaller families need smaller homes. Ireland has among the very highest rates of under-occupied properties in Europe.

A 75-square metre A rated terrace can be delivered today for under €300,000, while the SCSI puts an urban two bed apartment at over €520,000.

A scheme of new two-bedroom terraces, priced realistically, would sell out before the foundations were poured. I see that demand every week in our offices.

The return of well-designed, well-located smaller homes would ease supply and demand pressures alike, and planning policy should reward the builders who deliver them. The streets our grandparents built worked for bigger families than ours.

Build the terraces. The buyers are waiting, and so is the town.

For more visit www.fairdealproperty.ie.