House prices will continue to be high in the Dublin area in the foreseeable future because of a huge shortfall in the supply of new homes, according to a new study.
The pessimistic forecast is the result of a study described as a "wake-up call to Government". The study points out that if the Government were to take a few steps in the short term, the potential was there to significantly increase housing supply.
The study was carried out by the SCS Housing Study 2002, produced by the Dublin Institute of Technology in association with the Society of Chartered Surveyors.
One of the co-authors, Dr Brendan Williams of DIT, said the pattern of housing supply now emerging in the Greater Dublin Region clearly did not conform to the Strategic Planning Guidelines and some local authorities were doing little to help the situation.
The study found only 10,000 new houses were being built a year, as compared to the 15,000 to 20,000 units needed yearly in the Dublin region.
The SCS president, Mr John Daly, said: "The huge shortfall in new house completions is still an issue and this new study is our second 'wake-up call' to Government."
As long as supply production levels remained at 10,000 units a year, the annual demand in excess of 15,000 new homes would continue to support the existing unaffordable house prices in the Dublin market, he said.
"So the Dublin housing demand will continue to relocate into the mid-east and outer Leinster areas and we shall continue to see an outpouring of the Dublin workforce into counties Wicklow, Kildare, Meath and Louth, with added road congestion, transport difficulties, adverse environmental affects and all the inherent commuter problems," Mr Daly said.
Mr Daly also pointed out there was some good news. "The study shows that in the short term, the potential is there to increase housing supply significantly if Government were to take a few steps".
The SCS housing study advocates using existing urban space, including land left over after planning, and derelict and institutional or State-owned land; identification of land holdings in a broad range of public ownership for housing development purposes; and release of such land onto the market under the Strategic Development Zone planning process to ensure it carries "ready to go" planning permission.
The study showed housing supply and affordability difficulties had resulted in a widening gap between house prices in the Dublin region and those of the rest of the country.
It also found house prices were extremely high for a city of Dublin's size when compared to its European counterparts.
The absence of affordable housing would impact further on the future economic competitiveness of the Greater Dublin Area, the study pointed out.
"Ireland has already slipped in world competitiveness rankings, partly due to inflation in which high house prices have played a significant part, and this Government's current poor housing policies look like continuing to contribute to the downturn," Mr Daly said.
The study warned that outward flow of both housing and population was not conducive to sustainable urban development.
There had to be a clear linkage between home location and employment to sustain urban development, the SCS study warned.