Simon Harris, anticipated to be confirmed as taoiseach imminently, underlined the pressing housing matter in his recent address to the Fine Gael Ardfheis. His pledge to construct 250,000 new residences over a span of five years signifies the sort of housing “bidding war” expected during the forthcoming general election campaign. But, the potential achievement of such lofty ambitions remains questionable.
The prompt for the escalation in prices is fundamentally a shortage of supply. Property listings on a popular website totalled a mere 10,935, hitting an all time low. Consequently, competition for the properties that do make it to market is fierce, with homes usually selling for a premium of 4 per cent over the asking price.
Whilst escalating prices are pricing some out of the property market, the study indicates a band of more affluent purchasers, deriving benefit from substantial salary inflations in recent years, who possess the necessary financial muscle.
While an element of this reflects a robust job market and people earning higher incomes, which is positive, the consequential effect on the property market is far from welcome. High prices are the last thing needed, and there’s growing concern that the market is becoming more polarised between a smaller number of people who can afford the increased prices and the majority of prospective buyers who find property prices increasingly unattainable.
This embodies the nature of the problem awaiting Harris or anyone occupying the taoiseach’s position. It wraps up all the intertwined facets of the current housing argument from the crisis of homelessness, the scarcity of social and affordable housing, and the shortage of smaller, suitable homes for an evolving demographic. In addition, the persisting rental crisis showing no sign of letting up runs the risk that short-term solutions could undermine long-term availability.
Pledges of rapid progress and ambitious housing construction goals are frequently made by all political parties. However, voters may indeed respond more positively to a plan that is grounded in reality and addresses housing demands over the longer term, thereby underlining the importance the government needs to ascribe to this issue.
Progress in the housing sector will require the new taoiseach to risk agitating some of his fundamental supporters. While Sinn Féin’s attempts to significantly reduce nominal housing prices might face difficulties, the reduction of actual housing costs remains an essential aspect of the solution. If this causes discontent among the homeowners constituting Fine Gael’s base, they will have to accept it.