Time to solve and not debate housing crisis
Published 18/07/2015 | 02:30
It appears abundantly clear that the Central Bank's mortgage lending rules have taken some of the heat out of the property market. Sales are substantially down in the last quarter, but rising prices remain a serious issue, and one which the Government needs to urgently address.
The problems in our housing market are complex, but well-rehearsed. They essentially centre on the lack of finance available to developers.
A lack of money flowing to the construction sector means projects are not going ahead, fuelling further price increases for even the most modest family-sized homes.
There is no shortage of available land, or planning permissions in place. The latent demand is clearly present, but it appears that banks are so risk-averse they are refusing to lend, despite being recapitalised at the taxpayers' expense.
That means the Government needs to step in and either look for ways to provide this finance through creation of a strategic infrastructure fund, as was established in the UK, or help lower building costs by reducing VAT rates on residential construction.
The shortage of homes is not just affecting people hoping to purchase their first property, or trade up. It is also having a profound impact on the rental market, where prices have also risen.
It may also, over time, present a problem in attracting foreign direct investment.
There is no shortage of housing in Ireland: the problem arises with the number of units becoming available for sale.
That needs to be addressed, and among the things Government could do is make it attractive for older people wishing to downsize and sell their homes.
That could involve tax incentives or targeting investment at apartment developments on infill sites, freeing up family homes. This problem is not just confined to our major towns and cities, but is becoming a real issue in many counties.
The issues have been debated and discussed ad nauseam, yet there has been little or no action. The time for talking is over. Real and concrete solutions are needed.