Outlook on the Irish Housing Market

Key issues regarding the stability of the Irish economy seen in the housing market. The key issue of the housing crisis can be defined as growing demand that is not meet by current supply.

Many current government policies are concerned with increasing the volume of supply of completing housing units. For example, Rebuilding Ireland is associated with increasing housing supply to reduce homelessness. However, over the past 3 years supply has increased but housing prices have increased at a rate higher than the increase in supply. Governmental policies focus too much on supplying more volume instead of focusing on the affordability of housing.

According to Goodbody BER Housebulding Tracker, it is estimated that an additional 18,855 new housing units were added in 2018. This estimation is in line with previous forecasts. The majority of new dwelling competitions in 2018 were located in the Greater Dublin Area. More specifically, housing completions in the Greater Dublin Area accounted for 60% of the total new housing schemes in 2018. Although there has been an increase in the supply of housing, many problems in …

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UN Sent Irish Government a Letter on Housing Crisis

The Irish government received a letter in March from the UN rapporteur, Leilani Farha, stating that, “housing in Ireland is moderately unaffordable.” The UN was using this letter as a wakeup call to the Irish government and made some very serious allegations. One of the allegations that the letter made was, “house prices are now approaching levels last seen at the height of the property bubble.” This statement relives a terrible time in the history of Ireland. The Irish government responded by saying that average households only spend one-fifth of their income on housing costs but acknowledged some prominent issues that need to be improved.

A couple of the top problems stated in the letter related to land hoarding and equity landlords. First, land hoarding occurs when investors will purposefully sit on a property to increase demand and lower supply in the area before selling/renting. This is causing major problems for citizens that are struggling to keep up with the increasing prices. The other problem is landlords, “have openly discussed policies of introducing the highest rents possible in order to …

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Changing Population and Effects on the Housing Crisis

According to the Central Statistics Office, Ireland’s population is expected to grow from 4.78 million in 2019 to 5.9 million by 2046. The growth is occurring due to economic growth and recovery since the 2008 recession. The population of Ireland has increased by just over a million people since 1999. The rapid population growth suggest an even greater demand for housing in the future. The housing crisis will only continue to progress, because demand for homes and apartments will only continue to grow as the population increases.

An additional 1.12 million people will need to be housed by 2046 as population continues to grow. At least 12,500 homes need to be built each year until 2021. This is a massive task, considering that Ireland built just over 8,500 homes in 2012.

Demographic changes in population also present challenges in supplying more housing. Ireland’s population is aging. The 2016 National Census has confirmed that there has been a 19.1% increase in people aged over 65. By 2046, people over the age of 65 are expected to account for 1.4 million of …

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Mortgage Rescue Schemes, failed policy.

Internationally mortgage rescue schemes have been an abject failure from the perspective of using the success of their mission statement and intended scope as a gauge.

In researching this blog I spoke to representatives from The Association of Mortgage Intermediaries in the UK, the Mortgage Bankers Association of America, and Loan Value Group, they all had similar sentiments on rescue schemes to date.

The ‘Homeowner Mortgage Scheme in the UK planned to help 42,000 borrowers when it was set up in early 2009, to date it has helped 34. That is less than 1:1000 of the intended group.

Mortgage Rescue Help was another plan in the UK, that was meant to assist about 6000 in the short term, the actual figure as of Q3 2010 was 629 or about 1:10 of the intended target group.

In the USA the ‘Home Affordable Mortgage Programme’  (HAMP) was aimed …

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