Housing crisis likely to last for ‘foreseeable future’

The housing crisis is likely to last for the “foreseeable future” and will have a major impact on economic growth and Irish society, a Government report has warned.

The stark warning comes in an annual assessment of risks from Taoiseach Leo Varadkar’s own officials.

Even with Government measures such as the Rebuilding Ireland programme, a shortage of houses is "one of the most prominent risks and challenges facing the country".

The latest National Risk Assessment says affordability is a “growing risk” which is persisting even as housing supply increases, with rising wages driving house prices even higher.

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“For the foreseeable future housing shortages are likely to act as a constraint on economic activity and competitiveness, and reflect one of the most prominent risks and challenges facing the country,” it says.

Homelessness

It comes as Minister for Housing Eoghan Murphy is expected to brief the Cabinet tomorrow on the latest move to tackle the housing crisis, the National Regeneration and Development Agency.

The agency will co-ordinate and release State lands, such as bus stations and council assets, for large-scale housing developments.

Mr Varadkar previously said it will buy private land adjoining existing prime sites held by State and semi-State organisations in order to assemble land holdings.

The risk report argues that “housing supply is essential for societal well-being and economic growth”, adding the lack of affordable accommodation “has been linked to rising levels of homelessness with significant social and financial costs”.

Overheating economy

There are also fears of the economy overheating. Risks to the full implementation of the Government’s 10-year capital plan, such as whether the economy has enough capacity to build all the projects involved, are also mentioned. Another is local opposition to certain projects.

Other potential risks to the country include Brexit, and the reliance of the exchequer on corporation tax and climate change. The report also says “prevailing infrastructure and housing bottlenecks” may discourage some UK-based companies relocating here after Brexit.

It further argues that “supply issues” in the areas of housing, health and childcare could undermine Ireland’s attractiveness as somewhere to live and work.