Property market is not out of control, Minister for Housing says

Hike in prices ‘not unique to Ireland’ and can be handled by increasing supply – O’Brien

Minister for Housing Darragh O’Brien is to meet with families affected by the ongoing mica crisis in the northwest of the country on Wednesday. Photograph: Niall Carson/PA

Minister for Housing Darragh O’Brien is to meet with families affected by the ongoing mica crisis in the northwest of the country on Wednesday. Photograph: Niall Carson/PA

 

The property market is not out of control, nor are its problems unique to Ireland, Minister for Housing Darragh O’Brien has said.

On Monday, two reports showed a 9 per cent increase in asking prices and large hikes outside the capital, putting further pressure on a Government embattled by housing shortages.

“I don’t accept it’s out of control,” Mr O’Brien said shortly after the data was published by Daft.ie and MyHome.ie.

“It’s not unique to Ireland either but it’s something we have to get a handle on and how we get a handle on that is actually increasing supply.”

Both reports showed that while valuations outside Dublin are accelerating at a faster rate, the overall level of inflation has dropped from the 13 per cent reported at the end of June.

“We just can’t get away from the fact that we have had two very severe construction shutdowns in this country where we lost about 8 per cent, as well as the human resources within the construction sector, the people who are actually building those homes,” Mr O’Brien said.

He pointed to similar issues evident across Europe and in the United States, and said ongoing efforts to catch up to a decade’s worth of undersupply here was not only driving prices higher in Dublin and regional cities but elsewhere in the country.

Average prices rose by 4.9 per cent in Dublin to about €400,000 in the 12 months to September, whereas outside the main cities growth is running at an average of 12.9 per cent. Counties Mayo and Leitrim saw prices soar more than 20 per cent.

“There is no doubt that the restricted market that we have there and restricted supply, particularly over the last two years with Covid, has had a real impact,” the Minister said, but was buoyed by the recent rate of construction starts going into 2022.

He said the effort to catch up on supply shortfalls of the last decade had led to extended pressure on the second-hand market, notably in Dublin and regional cities.

“But not exclusively. We are also seeing post-pandemic [shifts], thankfully people moving into the regions, being able to find that they are able to work in the regions and that everything isn’t just Dublin-centric.” This has led to some increases in those areas, but from a lower base, he said.

In Berlin, Germany, voters expressed their anger at the housing market over the weekend via a non-binding vote demanding the new city-state government buy-out all landlords holding more than 3,000 housing units.

Reflecting on that move, Mr O’Brien noted the Irish Government’s commitment to a referendum on a right to housing.

“I don’t think there’s referendum fatigue in this country either but I think we need to work on what the wording will be, what those changes will actually mean and to back up any referendum with the legislative basis for that to be actually implemented,” he said.

Mica crisis

Meanwhile, the Minister is to meet with families affected by the ongoing mica crisis in the northwest of the country on Wednesday, insisting that nothing is off the table when it comes to possible solutions.

He said a proposed package he will bring to Government in the coming weeks will inevitably require State investment but that “those responsible and other sectors” should also contribute.

He also played down reports that Department of Housing officials told homeowners they would not get the 100 per cent remediation scheme they have been pushing for.

“I try to work in a collaborative way with them but at the end of the day I as Minister will make recommendations to my Cabinet colleagues, not my officials,” he said.