We’ve had dozens of policies and strategies all feeding into a steadily worsening problem characterised by a widening affordability gap
According to the Economic and Social Research Institute , almost 300,000 or 54 per cent of renting households in the Republic received some kind of state support to help with the cost of housing in 2020, the main one being HAP Now that house price inflation has been pared back to almost zero on the back of higher interest rates, you can see – more clearly at least – one of the main policy misfires, namely the inflationary impact of the three help to buy schemes: the Help to Buy tax rebate, the...
It also comes on the back of the most aggressive sequence of interest rake hikes ever undertaken by the European Central Bank, which should be deflationary. The Government’s own Housing Agency warned in 2021 that an initiative similar to the shared equity scheme in the UK had resulted in a 6 per cent increase in house prices in the Greater London area.
We have prices on a perpetual upward curve with fewer and fewer people able to buy, which means more people renting and more upward pressure on rents. This leaves more people in need of social housing or the Government’s preferred option, rent supports. In Dublin, house prices are now 10-12 times the average income while mortgages are cheaper to fund than rents in all but two local areas.
“When you think about it in those terms there are only two ways to resolve that, one way is to reduce house prices but no government is going to pursue a strategy of reducing house prices when 70 per cent of households have housing equity that would be destroyed by that course of action,” he said.
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