Joan Burton
Ceist:86. Deputy Joan Burton asked the Minister for Finance the number of new housing units that will be built by Home Building Finance Ireland; and if he will make a statement on the matter. [47246/17]
Amharc ar fhreagraWednesday, 8 November 2017
Ceisteanna (86)
Freagraí scríofa
As announced in my Budget speech on 10 October 2017, it is my intention to establish Home Building Finance Ireland (HBFI) to provide funding on market terms to viable residential development projects whose owners are experiencing difficulty in obtaining debt funding. HBFI will be a standalone entity which will provide funding directly into the market.
It is important to note that HBFI would not be directly involved in development as suggested by the Deputy's question. Its role would be solely as a commercial lender akin to a bank or private equity investor. HBFI will be lending on commercial, market-equivalent terms and conditions, which would depend on the risk profile of each individual project, the quality of collateral and the creditworthiness of the borrower.
With a proposed allocation of up to €750m, it is estimated that HBFI could have capacity to fund about 6,000 homes in the coming years depending on demand in the market. The current estimated shortfall in residential supply is 15,000 – 20,000 units per annum and, accordingly, HBFI, with an annual average delivery of up to 2,000 homes, would reduce this shortfall by about 10% (assuming a three year horizon). This would be a significant contribution but it would not make HBFI a dominant player in the residential funding market and it would clearly leave room for banks and other finance providers to increase their contribution to funding much-needed residential development.