Irish Government is spending extra money on builders and developers during the Covid crisis

Even during the Covid crisis, the Irish government spends a lot of money on builders and developers. In the six months to the end of July, the government had spent three times as much.

Home Building Finance Ireland, which was established in January last year, approved a loan of €340 million in July. That’s an increase of €114 million in six months.

It was funded by the €200 million Covid Momentum Fund, which was launched in May to resume construction projects that had stalled following the Covid-19 restrictions.

The ‘step-in’ fund is aimed at the makers of large projects to be completed at prime locations in cases where funding from other sources is not available. In view of the need for funding, an additional €100 million has now been provided.

HBFI was founded with €750 million from the Ireland Strategic Investment Fund with the goal of building 7,500 homes over five years. By the end of July, €340 million had been allocated for the development of 1,500 units in 29 projects in 16 counties.

Only one-third of the new projects are social housing projects. Funding for projects with 50 units has increased from €6 million to €12 million.

Ms. Dara Deering, chief executive of Home Building Finance Ireland, said the move was part of a decision to raise the ceiling on personal HBFI loans from €35 million to €75 million.

Finance Minister Paschal Donohoe said the Momentum Fund was released on the basis of a conviction. 

The Central Bank estimates that Ireland will need to build 34,000 units a year over the next decade to meet its housing needs. It is expected that less than half of what is needed this year will be completed.