1. Can the budget accelerate the building of apartments?

State support for apartment building – already very significant – has grown yet further in the budget. The key measure was reduction in the VAT rate on the construction of new apartments from 13.5 per cent to 9 per cent.

There is also a corporate tax exemption for profits associated with cost rental properties, enhanced tax deductions for apartment construction costs and other tweaks to schemes such as the Living City Initiative.

When you consider the range of schemes already in place and the fact that a significant number of schemes are being advance purchased by the Land Development Agency (LDA) or approved housing bodies (AHBs), many for cost rental schemes, the extent of State investment is now huge.

[ Buyers fear VAT cut on apartment sales could be a double whammyOpens in new window ]

Despite the existing supports, indications had been of a fall-off in new developments being planned, with developers complaining about a “viability gap” – meaning that when they compared costs with likely returns the sums did not add up.

Planning challenges and delays add uncertainty in to the mix. And without a lot more apartments being built the Government will not come anywhere near its housing targets.

An international cost report by the Society of Chartered Surveyors Ireland (SCSI) and Trinity College last year found Dublin to be the second most expensive of 10 European cites covered to build apartments, behind only Zurich. The cost here was some 15 per cent above the average, meaning that even if VAT went to zero, Dublin would still be classed as the fifth most expensive city.

This means that the VAT change alone is no magic bullet, according to Bryn Griffiths, director of Turner & Townsend and chair of the SCSI’s quantity surveying prof