Surveyors say incentives well below what is needed to tackle dereliction
Grant scheme provides up to €30,000 in grants for people to restore a vacant property to live in as their main home. If a property is derelict, that grant rises to €50,000. File picture: Frank O'Connor and Jude Sherry
WED, 22 MAR, 2023 - 02:00
PÁDRAIG HOARE, ENVIRONMENT CORRESPONDENT
Incentives are currently way off what is needed to tackle vacancy and dereliction, with only a quarter of said buildings across Ireland considered "financially viable" without grants, a major new study has found.
The Society of Chartered Surveyors Ireland (SCSI) study found that if current grants were increased by €50,000 to €100,000, then the number of properties becoming financially viable would almost instantly double.
A property is considered financially viable by the study where its market value is greater than the starting market value, as well as the renovation costs.
Some 1,250 applications have been made to the Government’s vacant home revamp grant scheme across the country in the nine months since it began. The scheme, known as Croí Cónaithe, was launched in July for properties in towns and villages, and expanded in November to cities and other rural areas.
It provides up to €30,000 in grants for people to restore a vacant property to live in as their main home. If a property is derelict, that grant rises to €50,000. This is along with up to almost €27,000 in further grants potentially available from the Sustainable Energy Authority of Ireland (SEAI).
The SCSI study examined 20 vacant and derelict case studies from all over the country. It found just five were viable for renovation without the application of grants.
When the relevant grants for owner-occupier homes under Croí Conaithe and the SEAI are factored in, just one additional property becomes financially viable, the SCSI said.
It examined properties in Schull and Beara in West Cork, Killarney post office, Grafton Street in Dublin, and a number in Co Limerick.
The costs of renovating a home owner-occupier type property ranged from €161,000 in Askeaton, Co Limerick, to €377,000 for a property in Dublin city, to €605,000 in West Cork, the study found.
So-called hard costs such as structure, plumbing, heating, extensions, doors and windows made up almost 90% of the overall finances needed.
The majority of chartered surveyors believe it is more difficult for borrowers to access funding for a renovation project when compared to new or second-hand homes.
This is due to their potentially higher risk profile and challenges accessing fixed funding upfront for a project, the study respondents said.
One of the report's authors, Lisa Rocca, said the findings highlighted key challenges around costs and accessing finance.
It’s clear current incentives and supports in place are not at a satisfactory level to make a meaningful difference to the current levels of vacant stock.
"We have 13 residential-type properties among our case studies and in a scenario where the Croí Cónaithe grant is increased to €100,000, the number which becomes viable doubles to eight, while two more are on the cusp of becoming viable, so it’s clear increasing the grants would have a major impact with regard to financial viability," she said.
There are also significant discrepancies in the number of properties actually vacant, the study found.
The SCSI said there were several data sources, including local property tax (LPT) returns, census results and GeoDirectory.
The Central Statistics Office (CSO) found in January that about one in 25 homes in the country was vacant, based on metered electricity consumption.
After last year’s census, the CSO said there were nearly 167,000 vacant houses and apartments.
Of those, nearly 48,500 homes vacant in 2016 were still vacant in 2022, while 23,500 were vacant in 2011, 2016, and 2022.
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