According to the Central Statistics Office of Ireland, residential home prices have gone up a whopping 74.5 percent from 2013 to 2019. This is a striking figure because average income has only gone up by 12 percent.
Rent prices have also increased significantly in this same period. A lease increase of 55.1 percent from 2013 to 2019 has been reported by the Residential Tenancies Board (RTB). These price increases have been a central cause of Ireland’s current housing crisis. In addition to pricing, the Central Bank’s residential mortgage rules have made buying a home much more challenging for the average person.
Regarding housing supply, there has been improvement from 4,600 apartments and houses in 2013 to 20,000 in 2020. Despite this increase, supply is still lacking and is not meeting the demand of the market. To account for the demand and population growth, about 37,000 per year by 2036 would be necessary.
Many are hopeful that an increased supply of housing will work to solve the continual problem of spiraling housing prices. The plus side of this is that building new homes is not a particularly difficult feat with many expertise barriers.
Anthony Foley divulges that solving the housing crisis will not come without hardship. To solve the problem, citizens will have to pay more in taxes to fund government programs. To create a greater supply, much production capacity will need to go towards residential housing which may lead to a postponement of other construction plans. Additionally, current homeowners witness a smaller property price appreciation.
According to Foley, it is necessary that the government is involved in the creation of more home supply and it should not only be left to the private sector. The government would not necessarily have to directly build the homes and apartments, but it is capable of sourcing investment at lower interest rates. It is important to note that with the increase in government housing construction, a reduction in private-sector construction would not be ideal.
Foley believes that the intentions for the accommodation level and quality of affordable housing must be clear from the beginning. Planning processes have to be rethought to lower the timeframe and costs of objections, fitting quality standards must be incorporated, and a minimum budget for construction must be determined.
Foley ends his writing with a call to action stating that society must band together and be ready to share the financial hardship that will come with solving the problem. To prevent the crisis from getting even worse, these solutions need to be implemented as soon as possible.
Foley, Anthony. “Anthony Foley: Housing Crisis Can Be Fixed, But it Won’t Be Quick and It Will Be Painful.” Irish Examiner, 18 July 2021, https://www.irishexaminer.com/business/economy/arid-40339955.html.