Housing report raises fears over price forecast

The latest report from the Economic and Social Research Institute (ESRI to you and me) is potentially worrying.

It predicts that house prices will rise by another 20 per cent over the next three years unless land is freed up like it was in America’s west in the 19th century.

And despite a document with a grandiose name, Rebuilding Ireland, the plan to make more houses available is currently falling way shy of its ambition.

It is our main story today.

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There is a really interesting graph accompanying the report. It shows that house prices have increased by over 450 per cent since 1995, even taking the crash into account.

The graph also shows they fell 53 per cent during the crash and have risen 52 per cent since bottoming out in 2013.

So a house worth €400,000 in 2007 would have fallen to roughly €200,000 during the crash. In recent years the price of this same house has probably returned to approximately the €300,000 level.

As Conor Pope reports, the ESRI is definitely not in panic mode: “The study compares house prices in the Republic with prices internationally and looks at price-to-income ratios and price-to-rent ratios before reaching the ‘unambiguous’ conclusion that ‘the Irish market does not yet display any signs of overheating’.”

Sure, this phenomenon is not isolated to Ireland, but that’s not going to butter any parsnips with the electorate. A generation of young voters are now coming to the cruel realisation that the first rung on the property ladder will always be out of their reach.

On Saturday, at his party’s national convention in Cavan, Taoiseach Leo Varadkar went into straight-talking-Leo mode and said Ireland’s homeless figures compare well internationally.

Sometimes being straight-talking Leo is good; sometimes being straight-talking Leo means having a tin ear to the sensitivities of people.

Sure, Ireland is not alone in facing such problems of housing shortages and homelessness. But it does not mean we can take comfort in statistics or international comparators when not enough is being done about it.

A timely reminder of that is a report from Sean Dunne who spoke to homeless people in Dublin.