John FitzGerald: The longer rent control goes on the more difficult it will be to unwind

Rent control risks inhibiting housing supply over the long term

The latest proposal to control the rise in rents may have very serious long-term ramifications for those who will continue to depend on the rental market. Photograph: iStock

The latest proposal to control the rise in rents may have very serious long-term ramifications for those who will continue to depend on the rental market. Photograph: iStock

A rising population can confer significant economic benefits on a country, among other things, sharing the burden of providing for an elderly population. However, it also brings with it a need for that most expensive commodity – housing. Ireland’s age structure means there are far more people in their 20s who want to move into their own place than there are vacant homes arising as older people die. By contrast, in countries such as Italy where population is actually falling, there is a much more limited need to build new housing, and prices are not under the same pressure.

In Ireland we have the challenge of a shortage of housing, along with a high cost of building. There is intense pressure on the Government to resolve the problem. The only long-term solution is to build more homes, but this takes time. Actions to reduce the cost of building or incentivise new construction, while very important, are not an easy sell to those clamouring for a home straight away.

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