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Irish News

Revealed: State spends €1.2bn on housing even though building is cheaper

7,169 homes purchased 'could have gone to first time buyers'

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The Government has spent €1.2bn throughout the housing crisis buying up almost 7,200 privately built homes, directly competing with first-time buyers in the property market, the Sunday Independent can reveal.

New figures show how local authorities have spent the significant sum buying privately built properties for social housing even though it would cost the State less to build its own new houses and apartments instead.

The revelation raises further questions as to whether it is government policy to avoid directly building housing to meet social needs.

Yesterday, Fianna Fail housing spokesperson Darragh O’Brien said Fine Gael’s reliance on the private sector for social housing was “completely unsustainable”.

VIDEO: Thousands join march to demand action on homelessness

The fresh insight into the State’s housing spend between 2011 and 2019 comes after thousands of people took to the streets yesterday to voice anger with the Government as part of the Raise the Roof protest in Dublin city centre.

The new housing data was compiled by Fianna Fail using Freedom of Information Act requests. The party sought information on house buying by every local authority in the country since Fine Gael came to power in 2011.

The trawl shows the average price paid for a social housing unit was €158,200 nationally, while this rises to €223,951 in Dublin. The cost of building a new home in Dublin during the same period would have been €199,000, according to Department of Housing figures.

In Dublin, around 1,100 homes could have been built for the amount it cost the State to buy 974 properties, which could have been bought instead by people hoping to own their first home.

Last year, a mere 838 homes were built by local authorities despite the worsening housing crisis.

Figures from the Central Statistics Office show there were more than 378,000 housing transactions between January 2011 and the end of February this year.

During this period, first time buyers accounted for 8.6pc of all executed transactions.

The figures obtained by Fianna Fail show local authorities accounted for 2pc of all residential property transactions during the same period.

Mr O'Brien said the Government should "switch focus" from relying on the private market for housing to building new properties for people in homelessness.

"Taxpayers have spent almost €1.2bn on private homes rather than investing in new social housing stock," Mr O'Brien told the Sunday Independent.

"This money is directly competing with first-time buyers, does not add to the total housing stock and in many cases was not the cheapest option," he added.

Writing in the Irish Independent yesterday, Minister for Housing Eoghan Murphy insisted the Government was not opposed to social housing and was not reliant on the private market to deliver new homes.

"This Government is not waiting for the market to solve the problem. The market never has. This is not a Government restrained by ideology."

The minister also said 18,000 homes were built last year and roughly one in four for social housing. This compares to just 4,560 houses constructed in 2013. He said 50,000 homes would be added to the social housing stock between 2016 and 2021.

Last year there were 18,072 new houses and apartments built.

The figure falls to 11,373 when one-off houses and 1,644 homes built by local authorities are excluded.

Around 2,100 turnkeys were bought by local authorities and approved housing bodies, which are mostly state-funded.

This means 18pc of completed new builds last year were bought by the State, or nearly one in five.

Technological University Dublin lecturer Dr Lorcan Sirr has said there are "likely political consequences" for politicians who "stand in the way of home ownership".

"Think of the couple in Kilkenny who have moved back to her mother's house for a few years to save a deposit for one of the new houses being built at the end of the road, only to find the council has stepped in and flashed its pieces of silver to buy the entire development," he said.

Sunday Independent

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