Mr. Dermot O’Leary, chief economist at Goodbody, has called on the government to avail of the upset caused by the pandemic so as to resolve the housing crisis. He suggests that the main cause of the problem is that successive governments, instead of taking the long term view, focus on the relatively short five-year electoral cycle.
Mr. O’Leary acknowledges that house prices in most economies is cyclical. However, Ireland’s has been more pronounced, witnessing major booms in three periods: a) The late 1940s; b) The 1958 to 1979 period; c) Between 1995 and 2006. Each of these cycles was followed by a fall in market prides of 38% to 56%; and a sharp drop in supply. He also draws attention to the fact that this leads to dysfunctionality in other parts of the economy, including social housing waiting lists, high construction costs, inefficiencies in public transport and utilities as well as urban sprawl.
The answer, according to Mr. O’Leary, is to flatten these cycle peaks, by utilising consistent funding streams and reducing profit motive. He calls for a Commission for Housing to be set up, as per promises made during the last election campaign. Such a body would not be constrained by political ideology and so could develop a congruent long-term vision, that would “deliver, on a sustainable basis, good quality, secure, affordable homes”.
Furthermore, Mr O’Leary suggests that the turmoil in living patterns, caused by the pandemic, provides the perfect opportunity to address these issues.
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