Sunday 21 October 2018

Colm McCarthy: Rising prices, policy failures

The unaffordability of housing in Dublin and the east is part of a problem that must be addressed, writes Colm McCarthy

'The crisis everyone saw coming'
'The crisis everyone saw coming'
Colm McCarthy

Colm McCarthy

With unemployment rates continuing to fall across the country, household incomes recovering and Brexit-related problems despatched to the long grass for a while, political attention will refocus on domestic policy failures.

The unaffordability of housing, especially in the east region, is the biggest failure by far and another few years of economic recovery will not make things better. If government candidates do poorly at the next election, the disaffection of losers in the great Irish housing lottery will be part of the reason.

House prices around the country are heading back towards bubble levels - good news for homeowners and for banks with mortgage-heavy balance sheets. Rents have risen even faster than prices. In the Dublin area rents are now higher than they were during the worst years of the bubble. Every rise in house prices is greeted with silent relief as banks and borrowers contemplate further declines in negative equity and mortgage arrears. But every upward kick also expands a generation of voters that struggles to meet rental costs and has abandoned the ambition to own their own home.

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