AGM Property Industry Ireland 1 December 2016
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Property Industry Ireland
AGM
1 December 2016
Property Industry Ireland
Chairman’s Statement
2016 AGM
Thursday, 1st December 2016
IBEC, 84-86 Lower Baggot Street, Dublin 2, D02 H720
by
Tom Phillips
Chairman
Property Industry Ireland
Slide 3
Why?
How?
What?
Slide 4
Why?
How?
What?
Slide 5
Why does PII do what it does?
Slide 6
Property-wide membership composition
100%
Project Manager
90%
Consulting Engineer
80% Bank
70% Supplier
60%
Contractor
Accountant
50%
Planner
40%
Architect
30%
Property Lawyer
20%
Investment Manager/Asset
Manager/Trust
10%
Developer
0%
Slide 7
When we started in 2011 …
“Developer-led Planning” (versus (viable) plan-led Development)
Slide 8
To provide one house: housing policy-makers - too many
Chiefs?
Central
Bank
NAMA Taoiseach
Public Expenditure
Finance
and Reform
Social
ESB
Protection
Transport
IDA
Infrastructure
Ireland
Ireland
DHPCLG Housing Agency
Irish Local
Water Authorities
An Bord Health &
Pleanála HSE
Source: Property Industry Ireland, 2016
Slide 9
We need to create more certainty
Slide 10And we helped deliver some
this year
The “Why”
Slide 11Why?
How?
What?
Slide 12Fast-track planning for housing delivery:
25 vs. 81 weeks
Slide 13Thank you to the Council
Aidan O’Hogan, Director Cormac O’Rourke Ivan Gaine
Property Byte Goodbody Stockbrokers Sherry FitzGerald
Jim Gallagher Mark FitzGerald Michael O’Flynn
Laverty Architects Sherry FitzGerald O’Flynn Construction
Michele Connolly Padraic Whelan Patricia O’Brien
KPMG Deloitte PJ O’Driscoll & Sons
Tony Reddy Tom Phillips
Reddy Architecture Tom Phillips + Associates
Slide 14We have a very strong Executive …
David Duffy David Howard
Chief Executive PII Executive PII
… backed with IBEC support
Slide 15PII has four Committees
Overall Committee Chairman: Michael O’Flynn
We rely on continued member-support to populate and fuel those Committees
Slide 16Why?
How?
What?
Slide 17Slide 18
Slide 19
Improved website
Slide 20Some activities in 2016
Election 2016 Political Parties’ Housing
Commitments
Property Priorities for the Next
Government
PII Roundable on Property
Priorities, 9th March 2016
Slide 21Ministers were only appointed on 6th May 2016
Slide 22And this is what the Ministers have inherited
Hornet
More “one-offs” than apartments; private sector delivering public housing; emergency
hotel accommodation; no one wants to pay for water …
Slide 23It’s largely, but not exclusively, about housing …
Slide 24But it’s also about infrastructure, commercial etc.
1. Local Infrastructure Fund (LIHAF)
2. €200m – but 4 times over-subscribed
3. Public off-site infrastructure
Game-changer? June’s announcement is very welcome
Slide 25Happy 2nd Birthday Cherrywood – where are the units?
The concept of the “Ghost Luas Stop”
Slide 26So where are “we” going?
Slide 27€200m on infrastructure or €50m+ on hotel bills?
or ?
Those living in emergency hotel accommodation (and others) need that certainty
Slide 28Property Industry Ireland has a key role to play
Are you up for the challenge?
Slide 29Thank You
tom@tpa.ie
Slide 30Property Industry Ireland
Chairman’s Statement
2016 AGM
Thursday, 1st December 2016
IBEC, 84-86 Lower Baggot Street, Dublin 2, D02 H720
by
Tom Phillips
Chairman
Property Industry IrelandAppointment of Coopted members
to Council:
Michele Connolly KPMG,
Chair Funding
Initiatives
Committee
Ivan Gaine Sherry
FitzGerald, Chair
Market Supply
and Demand
CommitteeDirector’s Report • Respond to Budget 2017 • Macro-prudential Review • Rebuilding Ireland launched mid-2016 • Residential Rental Sector • Building New Homes pillar launched Nov 10th • Preparing document to submit on planning system • PII a member of the Rebuilding Ireland Oversight Group • Rebuilding Ireland important policy item for PII in 2017
Supply & demand committee update Ivan Gaine Head of Sherry FitzGerald New Homes
Committee activities
• 6 meetings held over the last 12 months
• Guest speakers and topics covered included:
• Monday 18th January - Census 2016 and Classification of Dwellings - Dermot Cocoran, CSO
• Monday 29th February - PII Policy on review of Central Bank Marco-prudential mortgage lending rules.
• Monday 18th April - ESRI update on housing tenure of the older population - Elish Kelly - ESRI
• Monday 20th June - Changing demographics and its impact on the national and regional housing demand - Fergal O’Brien - IBEC
• Monday 19th September - Impact of Brexit on Irish Commercial and Residentail Markets - David Howard - IBEC
• Monday 21st November - Work Programme for 2017 - Discussion
- Action Plan for Housing
- Brexit (Complete by end Q1 2017)
- Vision for property sectors to 2020/2040 (complete by end Q3 2017)
- Commercial property sector research
- Regional Strategy & Infrastructure considerations
Work flows predominantly linked to Rebuilding Ireland and reacting to calls for engagement
2017 focus on a National Strategy and widening the brief beyond just housing!
We have 28 participants invited to attend committee meetings but need to have greater appeal and more variety of contribution…
Cushman & Wakefield and Sherry FitzGerald 35Volume of Transactions
2010 – 2016 H1
50,000
44,747
45,000
40,000
35,000
Volume of Transactions
30,000
25,000
20,899
19,752
20,000
15,000 13,443
10,000
6,881 6,126
5,000
-
2010 2011 2012 2013 2014 2015 H1 2016
National Dublin
Source: PPR/ Sherry FitzGerald Research
Cushman & Wakefield and Sherry FitzGerald 36Mortgage Drawdowns*
2007 - 2016
10,401 mortgages with a value of €2.0 billion drawn down in H1
- Cash buyers account for 47% of market
25,000
20,000
15,000
Units
10,000
5,000
0
*Excludes top-ups and re-mortgages
Cushman & Wakefield and Sherry FitzGerald 37
Source: Banking Payments FederationResidential House Prices
YTD 2016
Outside Dublin prices rose by 5.6% YTD 2016
Cushman & Wakefield and Sherry FitzGerald 38
Source: Sherry FitzGerald ResearchDublin Transactions – Value Breakdown
2013 – 2015
16000
14000
12000 11%
10%
Volume of Transactions
10000
9% 38% 44%
8000
33%
6000
4000
46%
52% 38%
2000
0
2013 2014 2015
>€250,000 €250,000-€500,000 €500,000 - €750,000 €550,000 - €1M €1M+
Source: PPR/ Sherry FitzGerald Research
Cushman & Wakefield and Sherry FitzGerald 39Cushman & Wakefield and Sherry FitzGerald 40
NOT the Housing Supply & Demand Committee Revised focus on all market sectors Offices in Cork, Galway & Limerick Informing the National Strategy Need for collaboration – broader engagement PII needs you!! Cushman & Wakefield and Sherry FitzGerald 41 41
Property Industry Ireland
Focus of the Planning & Development Committee
2016 AGM
Thursday, 1st December 2016
IBEC, 84-86 Lower Baggot Street, Dublin 2, D02 H720
by
Tom Phillips
Chairman of Planning and Development Committee /
Chairman of Property Industry Ireland /
Tom Phillips + AssociatesPlanning & Development Committee in 2016
1. Drafting review of the Irish planning system
2. Submission to the Dublin City Development Plan
on height
3. Submission to the First 100 days’ document
4. Presentations by keynote speakers – e.g. Niall
Cussen
Slide 43Planning & Development Workload 2017
1. Formally elect new Committee Chairman
2. Finalise Planning Root-and-Branch Review (Q1 2017)
3. Co-ordinate PII input to National Planning Framework
submission
4. Disseminate overview of the anticipated Planning Acts
(100+ residences; Office of the Planning Regulator)
5. Complement other Committees on cross-over initiatives
(apartment sizes; keyworker accommodation; student
accommodation, etc.)
6. Other
Slide 44Slide 45
Ireland’s planning policy hierarchy 2017+
National
NPF
Regional
Spatial and Economic
Strategy
City and County
Development Plans
Local Economic and
Community Plans
Local Area Plans/
Area Based Local Development
Slide 46National Planning Framework (2017 – 2040)
10 key questions
1. What should Ireland look like in 20 years?
2. How do we ensure that every place can realise its potential?
3. Where will jobs be located and what kind of jobs will they be?
4. Where will we live and what types of housing will be needed?
5. What are the key services that people will need?
6. Where will Ireland fit in a wider (geographical) context?
7. What are the planning responses to key environmental challenges?
8. What infrastructure is required – what are the national priorities?
9. How should a National Planning Framework be implemented?
10. What will success look like?
Draft National Planning Framework due in Q2 2017
Slide 47“Strategic”, Sterilised or Slow Development Zzzzzones?
Slide 48Our homework largely dictated by …
1. 84 No. Actions identified
2. 27 No. specifically planning-related
3. Examples: Part V; Strategic
Management Plans; Part 8 streamline;
An Bord Pleanála review; root-and-
branch planning review, etc.
Slide 49In conclusion …
… particular thanks to the Committee Members and Executive
Slide 50Property Industry Ireland
Focus of the Planning & Development Committee
2016 AGM
Thursday, 1st December 2016
IBEC, 84-86 Lower Baggot Street, Dublin 2, D02 H720
by
Tom Phillips
Chairman of Planning and Development Committee /
Chairman of Property Industry Ireland /
Tom Phillips + AssociatesProperty Industry Ireland Funding Sub Committee 1 December 2016
Policy Committee
Priorities 2016
• Infrastructure Funding
• Funding Social Housing
• Central Bank Mortgage Restrictions
• Development Funding
• Help to Buy Schemes
• Cost to Build – in particular tax base and scheme viability
© 2016 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved. Printed in Ireland.
532016 Progress
Issues Actions
Infrastructure • Discussions with Minister Coveney, Bob Jordan, Robert Watt,
Funding ISIF
• Solutions proposed included: Local Authority Borrowing,
Grants, ISIF support, and Central Government support
• Local Infrastructure Housing Activation Fund (“LIHAF”)
Funding Social • Discussions with Minister Coveney, Bob Jordan, Robert Watt,
Housing ISIF
• Relevant departments lobbied to develop out ideas already
proposed
• Currently caught in Balance Sheet discussions
Central Bank • Considerations of European comparables
Mortgage • Submission to Central Bank
Restrictions • Loan to Income unchanged – more work to do
© 2016 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved. Printed in Ireland.
542016 Progress
Issues Actions
Development • Commercial development funded via public equity, private
Funding equity and an element of bank debt
• Viewed as less constrained by capital but equity financing is
expensive
• Can we/should we go back to more leverage? e.g. to take
advantage of a Brexit opportunity
• Funding is not the primary problem holding up residential
Help to Buy • Lobbied Government to introduce
Schemes • Now announced. Implementation to be monitored
Cost to Build • Investigated alongside SCSI and Technical Committee
• Ireland out of line with UK/Europe
• Myriad of reasons
• To be kept under review as new policy initiatives take effect
© 2016 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved. Printed in Ireland.
552017 Priorities
• Central Bank Mortgage Restrictions and Help to Buy Implementation
• Cost to Build incl. Taxation Regime for Property
• PRS Sector
• Social Housing Sector
• Brexit
• Development Funding – new providers and cost
• Review of Capital Expenditure Plan
• Budget Submission
• Residential Action Plan Implementation:
- LIHAF
- Affordable Rental scheme
- New Funding Proposals
© 2016 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved. Printed in Ireland.
56Conclusion
• All key priorities progressed in 2016
• Good progress in some areas, more to do in others
• Delivery of Action Plan still Work In Progress so more to do
• Expanded priorities for 2017
• New members welcome
© 2016 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved. Printed in Ireland.
57Priorities – Action
Action
No.
2.1
needed
Description of Action
We will substantially increase the delivery of social housing to 47,000
Objective
To meet the social housing needs more quickly across
homes by 2021, with funding of €5.35 billion, particularly focusing on new the range of programmes and supports
direct build projects by local authorities and AHBs
2.2 We will review existing current and capital programmes on an ongoing To accelerate the delivery of housing and ensure that
basis to ensure that they are relevant and are meeting the needs of projects are advanced efficiently and effectively.
citizens.
2.5 We will put in place a Housing Agency Fund of €70 million, with specific To deliver some 1,600 units by 2020.
focus of engaging with banks and investment companies, primarily private
equity funds, to acquire properties.
2.8 We will support the leasing of additional privately developed dwellings To stimulate development and increase social housing
beyond the extent envisaged by Part V, including the up-front purchase of stock.
the Part V social housing requirement.
2.13 We will introduce an AHB Innovation Fund. To support development of innovative financial models,
including SPVs or mutual bodies, to enhance the
potential combined contribution of the AHB sector.
3.3 The National Treasury Management Agency, through ISIF, will develop To facilitate the delivery of on-site infrastructure
proposals to offer competitive financing on a commercial basis, to releasing the delivery of housing on key development
developers or consortia of developers, to meet onsite and other sites, thereby improving the economic viability of such
infrastructure requirements on large development sites. developments.
4.1 We will develop a comprehensive strategy for the rental sector. To increase supply and support the development of a
stable, strong and viable rental sector offering true
choice for households, investment opportunities for
providers and reflect rights and responsibilities of tenants
and landlords.
4.5 We will examine standards, costs and feasibility of Build-to-Rent on a large To improve affordability of good quality sustainable rental
scale and commission research on ways in which further investment might accommodation.
be encouraged.
© 2016 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved. Printed in Ireland.
58Priorities - Action
Action
No.
4.6
needed
Description of Action
We will introduce a new affordable rental scheme to enhance the capacity of
Objective
To provide long-term affordable residential
the private rented sector to provide quality and affordable accommodation for accommodation for low to moderate income key-worker
households currently paying a disproportionate amount of disposable income households in urban areas of high demand and provide
on rent. an economic incentive to increase supply of rental
accommodation.
4.11 We will establish funding mechanisms for Institutes of Technology to To facilitate the Institute of Technology sector in
support the development of their student accommodation capacity. developing their potential for on-campus student
accommodation through addressing current borrowing
capacity and funding constraints.
© 2016 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved. Printed in Ireland.
59Priorities - Review
Review Description of Action Objective
No.
1.21 We will examine how the Mortgage to Rent scheme can be improved to To support households in long-term mortgage arrears to
facilitate more households, and explore alternative models for the remain in their homes.
purchase of units, including long-term leasing arrangements.
2.4 "NTMA will work with the private sector to establish a funding vehicle To deliver 5,000 social houses over a five year period.
capable of facilitating off-balance sheet investment in delivering social and
private housing, through: acquiring properties for onward long-term
leasing to LAs and AHBs, and activating new residential construction for
the broader build-to-rent sector." To deliver 5,000 social houses over a five
year period.
4.9 We will establish dedicated delivery structures, such as AHBs in the To provide additional funding mechanisms for the HEI
Higher Education Institutions (HEI) sector to access Housing Finance sector, in conjunction with the HFA.
Agency funding, and complete any required policy, regulatory or legislative
changes necessary.
5.6 The Housing Agency will be directly funded with €70 million in capital To complement, but not displace, ongoing purchasing
Exchequer funding to find and acquire suitable portfolios of vacant activity by local authorities and AHBs.
properties for social housing directly from financial institutions and
investors.
5.7 We will establish a Repair and Leasing Initiative (RLI) for local authorities To immediately increase the supply of social housing
to identify appropriate vacant privately owned properties and provide grant options through long-term rental leases.
support to prospective landlords to bring properties up to standard in return
for entering into long-term lease arrangements.
© 2016 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved. Printed in Ireland.
60Priorities - Monitor
Monitor Description of Action Objective
No.
1.19 The Government will work with the Central Bank to ensure that the In collaboration with the Central Bank, and based on
Code of Conduct on Mortgage Arrears provides a strong consumer an assessment of the restructuring options available
protection framework for borrowers struggling with their mortgage to borrowers, work to ensure that distressed
repayments. borrowers are facilitated to meet the terms of a
sustainable restructuring arrangement and
consequently to remain in their primary residence
where possible.
1.20 We will request the Central Bank to conduct an assessment of existing To ensure that there are sustainable restructuring
sustainable restructuring solutions across all lenders and non-bank solutions available to distressed borrowers.
entities operating in Ireland.
2.6 We will ensure that resources are made available to local authorities To increase social housing stock.
and AHBs to facilitate the purchase of newly built private dwellings to
the fullest extent envisaged, by Part V of the Planning and Development
Acts.
2.15 We will establish a Regulator for the AHB sector to oversee the effective To safeguard public and private investment,
governance and financial management of voluntary and co-operative rationalise and enable increased supply from the
housing bodies. voluntary and co-operative housing sector.
2.17 We will increase the target of the Housing Adaptation Grant drawdown To support the continued independent occupancy of
to 10,000 homes in 2017 (up from 8,000 in 2016) and will streamline the their own homes by older people and people with
application process. disabilities.
2.21 We will continue to support the DoH and HSE in the programme of To provide €10m in 2016 to support community-
transitioning people from congregated settings to community-based based living for people with disabilities in
living through ring-fenced housing capital funding. congregated settings, with further funding for 2017
and 2018.
© 2016 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved. Printed in Ireland.
61kpmg.ie © 2016 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Ireland. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The KPMG name and logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity.
• Common Areas completed • Site Developme nt completed • Apartment s Fitout completed
• Common Areas completed • Site Developme nt completed • Apartment s ‘Grey Boxes’
Service
Risers
Fitted with:
• Electrical
• IT/Telco
• Water
• Waste
• Alarm
• Heated
Water
Supply
(centralise
d)
• (Gas)Owner
1 Bed. Apt.
OptionOwner
2 Bed. Apt.
OptionDeveloper Typical
Layout
3 Bed. Apt.
OptionThank you For your attention
David O’Connor, Head of Housing Delivery Unit DHPGLC
1. Qualified as an architect in 1976
2. Worked in private practice for 9 years before joining the local
authority service in Dublin Corporation in 1985
3. Appointed County Architect in the newly-established Fingal County
Council (FCC) in 1995
Gained post of Director for Planning and Development (3 yrs)
Appointed County Manager with FCC from 2006 to 2013
4. Member of the RIAI for over 20 years - held Vice-President and
Honorary Treasurer posts
5. Recently appointed Director of the Housing Delivery Office
Slide 86Contact details info@propertyindustry.ie / 01 605 1666
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