CORK is a city on the rise. The regional economy is booming, with strong employment across the pharmaceutical, IT and finance sectors, and ever-increasing numbers of new graduates, trainees, apprentices, professionals and researchers coming to the city to live and work.
Forecasts for the Cork region suggest a significant increase in population size in the coming decades, with Project Ireland 2040 envisaging the population of Cork city and suburbs to grow by between 105,000 and 125,000 (50-60%) by 2040.
But, like the rest of the country, Cork city is facing a major housing problem in both the rental and purchase markets, and the supply of the right type of homes in the right locations is a major issue.
Affordability is also of key concern, with a recent report by EY DKM ranking Cork as 17th in the country in terms of overall housing affordability. Despite a slowing of growth rates, house prices have still increased on last year — figures from Myhome.ie for the second quarter of 2019 show a three-bed semi in Cork costs approximately €240,000, an increase of 4.4% on this time last year, while a four-bed semi costs in the region of €295,000, up 2.7% on 2018, and a two-bed apartment cost €185,000, up 2.78% on last year.
Prices in the county are rising as a knock-on effect of the supply squeeze in the city, with Daft.ie reporting house prices for a three-bed semi rising by 8.1% in the last year to €157,000. While increasing, county prices still represent good value and reflect the potential of rural areas to provide for, and gain from, the overflow of demand in the city.
In addition to price growth, supply issues are thwarting the hopes of thousands of would-be house-hunters and FTBs to secure the right home, and while house price growth is slowing, it is of little comfort to those who are struggling to cobble enough money together for a deposit and/or find a suitable property that meets their needs and their budget.
Rents are crippling those already living in Cork, and the availability of suitable rental accommodation remains a huge challenge for those looking to come here. Daft.ie report that average rents overall are up 12.7% this year at €1,006 — 32% higher than they were at their peak 12 years ago.
Rental prices are still rocketing, and many tenants are struggling to keep their rent at a reasonable rate. Rent controls have helped somewhat and recent measures announced by Government to further rent caps, by designating a raft of new areas as rent pressure zones, are certainly to be welcomed.
What can and what needs to be done in Cork’s housing market?
One of the biggest issues in addressing the supply issue is that the cost of land is far too expensive, which is having the knock-on effect of making the viability of developments borderline at best — or, indeed, simply unachievable. We need to do more to bring down the cost of land and tackle the battle between the ‘wall of cash’ from investment funds looking to develop Irish property and the will of small indigenous investors to purchase land for schemes.
More houses, of course, would satiate demand, meaning the market would become less competitive and more affordable. But we have to make the moves now to allow these developments to happen.
We also need much greater numbers of mixed-used developments and apartments in the city as a matter of urgency and to work towards providing affordable housing solutions for students, workers and families.
While it’s true that Cork needs more new builds in certain areas, this is not the case for all locations. Developers and Government planners need to be cognisant of this need for a more even distribution of new home schemes in rural locations throughout the region to entice more and more workers out of expensive urban property markets, and into more affordable suburban and rural areas.
Another issue to be addressed is labour force shortages and rising wage costs within the construction industry. The industry continues to face many difficulties in attracting the calibre of skilled labour it needs not just in Cork, but throughout the country. Efforts have been made to put measures in place to attract people back into the industry in order to meet the workforce requirements necessary to deliver the properties that are so desperately needed. A prime example of this is the programme of roadshows that has been rolled out by the Construction Industry Federation in schools around the country aimed at promoting a career in construction.
Technology also has an important role to play by opening up the types of roles available. For example, an operator from a contractor’s HQ could remotely assist an engineer in problem-solving an equipment fault, and innovations in off-site manufacturing and 3D printing could also be game changers for the industry. In embracing technology, we can entice the younger generation in to fulfil these more computerised and technology-based needs.
Cork is on the up — there is no doubt. The civic mission of the city is to attract more multi-national corporations and the cranes across the skyline demonstrate our commitment to this. But there is much work to be done, and an affordable, sustainable market of houses and rental accommodation is an essential part of capitalising on the opportunities we have carved out for the region.