Savills Ireland Calls for Vital Housing Market Reforms in Pre-Budget Submission - Construction Network Ireland - Construction Network Ireland

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Published in Construction on 27/06/2024

Savills Ireland Calls for Vital Housing Market Reforms in Pre-Budget Submission

CNI reports

Savills Ireland is pleased to announce the release of its Pre-Budget Submission for 2025, presenting comprehensive recommendations to address the pressing challenges in Ireland’s housing market. Central to this submission are critical adjustments to the Help-to-Buy scheme, the easing of rental caps, and a significant reduction in commercial stamp duty to stimulate investment and growth.

Mark Reynolds, Managing Director of Savills Ireland, emphasised the urgency of these measures:

“The housing market in Ireland stands at a crucial juncture. Our recommendations are designed to promote stability, encourage investment, and ensure a steady supply of housing across all sectors.”

Help-to-Buy Scheme: Raise the property value threshold to €614,000 in Dublin

The Help-to-Buy (HTB) scheme has been a cornerstone in assisting first-time buyers. To date, of the 48,454 HTB claims made, 47,356 have been approved.

Savills recommends extending the scheme until December 2028 and raising the property value threshold to €614,000 in Dublin to account for rising construction costs and consumer inflation, which has increased by 22.8% since 2017. These adjustments will ensure continued support for new homeowners and stimulate the housing market.

Easing of Rental Caps

5,000 private rented sector (PRS) units were delivered in Dublin in both 2022 and 2023 – representing the most successful segment of the residential market from a supply point of view. However, in recent years, the market has experienced a dramatic downturn, attributed primarily to government interventions such as rental caps, combined with rising interest rates and construction costs.

These measures, although aimed at protecting tenants, have inadvertently discouraged international investors, leading to a decline in the development of new rental units – with Dublin PRS completions set to decline by 68% to 1,600 units in 2025, Savills data shows. This reduction is further evidenced in the CSO’s planning permissions data for Q1 2024, which showed a 57% y/y decrease in the number of apartments approved in Dublin during the quarter. 

Savills submission calls for a reassessment and easing of rental caps create a more favourable investment environment, ultimately leading to an increase in the development of new rental units.

“Easing rental caps is essential for attracting the international capital needed to sustain and grow our Private Rented Sector,” Mark Reynolds stated.

Commercial Stamp Duty: Reduce rate from 7.5% back to 2.0%

Ireland now has one of the highest commercial stamp duty rates in Europe. Fewer commercial developments will lead to slower economic growth, as fewer businesses have the option of establishing or expanding their operations in Ireland. Less transactional activity might also ultimately mean a reduction in government tax revenues, which is counter to the objective of these transaction taxes.

Savills proposes reducing the stamp duty rate from 7.5% back to 2.0% to restore investor confidence and boost market activity. This measure is critical for maintaining Ireland’s competitiveness as a prime investment destination.

Additional Measures and Recommendations

  • Student Accommodation: Financial incentives and tax breaks for developers, integration of developments into local plans, and fostering public-private partnerships to address the shortfall in student housing.
  • Housing Supply: Extending the Temporary Development Contribution Waiver Scheme to counter high construction costs and support housing commencements.
  • Labour Demand: Increasing funding for construction trade training and enhancing the visibility of apprenticeships to attract and train a skilled workforce.
  • Data Services: Improving the accuracy and timeliness of housing market data through increased funding, real-time data systems, and enhanced accessibility.
  • Sustainability: Advocating for substantial investments in grid infrastructure and providing incentives for energy-efficient building upgrades to support Ireland’s environmental goals.

Savills Ireland’s Pre-Budget Submission 2025 outlines a strategic roadmap to address Ireland’s housing challenges. The proposed measures aim to foster a robust, sustainable, and inclusive property market that meets the needs of all stakeholders.

Read the full submission here –