Thursday 23 May 2019

Like it or loathe it, but this plan makes sense

Peter Flanagan

IT has to happen eventually, but that doesn't mean everyone will be happy about it. The Government's plans to ease the cashflow to builders in an effort to get construction moving again will be deeply, deeply unpopular in some circles.

Rightly, people who have seen their lives destroyed by the crash will be asking why developers should get a leg-up when they cannot afford to build houses themselves.

Unfortunately, that argument misses the point.

House construction has basically stopped for the past five years to the point where there is a shortage in Dublin. Prices are now rising by as much as 25pc a year in parts of the capital because supply is so tight, and there is a very real danger that a new housing bubble is starting.

Yesterday, a report from the Housing Agency estimated 80,000 houses need to be built in cities over the next five years.

Where is that building going to come from? At the moment there are very, very, few new housing developments taking place.

By one estimate, there will be only 750 new homes built in Dublin this year.

The problem for builders is simple. They can't get the finance together to build new homes, or else they can't sell new homes at a price that justifies building them.

We can't have it both ways. We can't complain about rising house prices and the shortage of family homes on one hand, but prevent new houses being built on the other.

The devil will be in the detail but on the face of it, the Government's plan makes sense. We may not like them, but we need developers to get out and build new homes – and in some parts of the country, we need it very quickly.

Irish Independent

Editor's Choice

Also in Irish News