Shiver of fear that could save the property sector
The housing crisis will not be resolved by simply easing the availability of finance, writes Colm McCarthy
How about this for a policy achievement: over-provide finance for houses, over-produce houses, bring down the banks and the country to its knees and end up with, would you believe, a shortage of houses.
Fortunately, there is no housing crisis in large parts of the country. Five minutes on any of the property websites will confirm that perfectly acceptable homes are for sale at prices below the cost of construction, or to rent at affordable cost, in most places outside the Dublin region and a few provincial cities. But the burden of mortgage arrears on households around the country and the shortage of affordable housing in urban areas, especially in Dublin, are genuine crises and have a common source. Ireland has burdened itself with a housing policy and a system of housing finance whose failures were at the heart of the financial collapse and which cry out for reform.
The proposals on housing supply and housing finance which have emerged from the political parties during the election campaign propose no fundamental changes to either system. Some are voter-friendly palliatives that will make little difference. Some, ominously, are repetitions of boom-time errors guaranteed to make things worse.