Property developers told to lower their expectations by Minister

Property developers told to lower their expectations by Minister

Developers should not expect “massive profits” from housing anymore, and some need to lower their expectations, Minister for the Environment Alan Kelly has said.

A different type of developer was needed – one that thought long-term and was willing to invest in social and affordable rental housing, as well as in homes for sale.

Speaking to The Irish Times, the Minister also said a Labour Party environment minister was best to ensure social housing was delivered over the coming five years.

He called for a “total change in thinking about housing”, saying the economy’s reliance on the housing market during the Celtic Tiger was a “false economy”.

“We can never go back to that. What we need is the balance. Housing needs to meet the requirements of the State rather than be an economy in itself . . . I don’t believe the market controls everything,” he said.

“I am not one of those politicians. I am very much a person who believes in Keynesian economics. The market has its place but you have to ensure the market is fairly managed.”

While builders and developers would not return to housing until it was profitable, they had to think differently.

“The day of the excessive, massive profits are over. We need people who are going to be thinking long-term, who are going to be thinking equity in their schemes.

“There probably aren’t enough developers in Ireland anymore. And then you have some with unbelievable expectations . . . Also, they have to change their model on how they think they are going to fund projects, in relation to what profits they believe they are going to get over periods of time.”

Read the full story here.

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