Budget must set path to stable housing market

The National Housing Statement marks an important contribution to the debate on the future of housing in Ireland, according to the Institute of Professional Auctioneers and Valuers.

However, Pat Davitt Chief Executive of IPAV – which represents almost 1,000 auctioneers and valuers – said rapid tackling of the impediments to growth in housing supply is essential.

“While the statement highlights the big and unsurprising problem of the divergence between supply and demand, its real value rests in that it brings together in one report a more wholesome picture by including trends in the market such as the increase in smaller households and the corresponding decrease in larger households, population projections and the acknowledgement that mortgage arrears and negative equity are issues that remain to be addressed.

“All of these elements impact, not just the economic life of the country but have serious social impacts since housing is a basic human need.

“It is in the interest of all that we reach a sustainable housing market, not one that is subject to the volatility we’ve seen since 2007,” he said.

However, Mr Davitt said the Housing Agency Statement needed a balancing position where it notes that the Eurostat European House Price Index showed a 15% annual increase in Irish residential property prices in the period 2013-2014, more than six times the EU average of 2.4%.

“To fully inform people, this part of the statement should have acknowledged that Irish property prices had suffered a far more severe drop since 2007 than any of its European counterparts,” he said.

Mr Davitt also said that as a country, Irish people must learn the lessons of the property crash. “We have an opportunity now to address the historical deficit of lack of implementation, albeit eight years after the beginning of the property crash.

“Building a sustainable property market is now in the hands of the Government and Budget 2016 represents a real opportunity to address many of the pervasive problems in a cohesive way, especially now that the economy is growing.

“The issue of building costs was not one requiring extra State funding or a loss to the Exchequer. In a market where properties are still available for sale at less than the cost of building, it is a no-brainer that tackling the issue will improve the public purse,” said Mr Davitt.