The State is on track to deliver less than 20 per cent of the apartments it aimed for under a key scheme designed to deliver more homes for owner-occupiers.
The Croí Cónaithe Cities Scheme aims to support the building of apartments for sale to owner-occupiers by providing funding to developers to cover the “viability gap” between the cost of building apartments and the market sale price.
The target for the scheme was the delivery of 5,000 apartments by the end of 2026.
However, new figures - released by the Department of Housing in response to queries from The Irish Times - show just seven contracts with developers have been signed so far for the delivery of 870 apartments.
This represents just 17 per cent of the original target and indicates the scheme will miss its stated goal by a large margin.
The scheme, which is administered by the Housing Agency on behalf of the Department of Housing, was established in 2022.
A budget of €450 million was allocated to it, with developers able to claim a maximum funding of €120,000 per apartment.
This cap can be exceeded by up to 20 per cent in some regional cities where lower market prices mean the viability gap is larger.
The scheme is aimed at newly built developments in Dublin, Cork, Limerick, Galway and Waterford.
Developers must have secured planning permission before applying, the complex must be four storeys or higher with at least 40 units and apartments can only be sold to owner-occupiers.
[ Officials cast doubt weeks before election that 2024 housing targets would be hitOpens in new window ]
The funding is only paid at the point of final conveyance to an eligible owner-occupier, rather than at the start of construction.
Sinn Féin’s spokesman on housing, Eoin Ó Broin, said the scheme was “badly designed” and “too expensive”.
“Any funds not yet contractually committed under the scheme should be diverted to local authorities and approved housing bodies into the delivery of genuinely affordable homes for working people to buy,” Mr O’Broin said.
News of this scheme’s lack of success comes as new data shows the number of apartments granted planning permission last year fell by almost 40 per cent.
While the Central Statistics Office (CSO) data published last week showed a fall-off in planning permissions for all unit types in 2024, the main driver was planning permissions for apartments, which dropped 39 per cent, from 21,487 to 13,194.
The sharp fall in apartment construction is thought to be down to the exodus of international private investors from the sector, as well as rising construction costs which outstrip market value.
Latest figures from the Department of Housing show the average development cost of building a two-bedroom apartment in an urban area is now €592,000.
Apartments cost more to build than traditional houses because they often require expensive underground parking, lift shafts and fire safety measures.
They can also only be sold in one block when construction is ended, unlike housing developments, which can be sold off in phases, freeing up equity for developers along the way.
