Taoiseach Leo Varadkar has said he cannot guarantee that the Government will meet its housing targets for 2023.
Speaking in Brussels where he is attending an EU Council summit, Mr Varadkar also said he believes the economy is slowing down and that interest rates could fall next year.
His comments on housing come after newly published figures for the third quarter of the year showed how the Coalition faces an uphill battle to meet its individual targets on social and affordable homes. Housing emerged as one of the biggest issues in the last general election and will likely remain a major issue leading into the next election.
“On our housing targets, I can absolutely guarantee that we will beat the overall housing target, in fact we will exceed it so we’ll build more than 30,000 new homes this year, and that’s the highest in well over a decade,” Mr Varadkar said.
“What I can’t say for certain is whether we’ll meet every sub target within that: social, affordable, private, cost rental, etc. I can’t guarantee that. But I can say that we will build more than 30,000 new houses this year, more than we have in well over a decade. And we do expect new social housing output to exceed last year’s output. So that will certainly be the highest since 1975.”
Newly-released figures for the first nine months of this year indicate that, in that time, just over 4,800 social homes were delivered, of which 2,642 are new-builds. This is far short of the target for new-builds for the year in Minister Darragh O’Brien’s Housing for All plan, which is set at 9,100.
Meanwhile, some 2,000 “affordable housing supports” were delivered in the same period, less than half of the 5,500 target.
The Taoiseach also predicted that the inflation cycle is peaking and that rate cuts may be on the cards in 2024.
It comes after the Economic and Social Research Institute (ESRI) cut its domestic economic growth forecasts for a third time this year as households and businesses rein in spending amid the cost-of-living crisis.
“On the broader economic picture report, I think the report we saw from the ESRI tells a very important story. The Irish economy is slowing down. That is very evident. After the pandemic restrictions were lifted, the economy took off like a rocket, it grew very fast. That is now changing because of domestic and international factors. Our economy is now slowing down. It is strong, but in my view it confirms that the Government has made the right policy decisions,” Mr Varadkar said.
“A lot of people six months ago, a year ago, were talking about the economy overheating. Nobody’s talking about that now. Very recently some people were talking about the Government fuelling inflation; in fact inflation is coming down.
“It’s going to be between 2 per cent and 3 per cent next year. That means that we are at the peak of the interest rate cycle in my view, and I think we’ll start to see interest rates fall next year which will be very welcome for borrowers and mortgage holders in particular. But we should also stick with the budget strategy, because the economy isn’t overheating, it is slowing down, so the budget package makes sense. And next year we need to ramp up capital investment and make sure that we have an investment in the economy and create further capacity.”
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