There’s a dreary predictability to reports from the property industry. They tend to say two things. First, there is a pent-up level of demand for housing in the economy, driven by deep-rooted demographic trends such as population growth and changes to household size, that can only be addressed through a massive pick-up in construction.
But – and here’s the second and seemingly contradictory point – the industry can only build at a certain price point because of high construction costs and strict regulatory requirements. As a result, the Government needs to step in and bridge the affordability gap between buyers and developers with more help-to-buy initiatives, thus ensuring the viability of the market.
The objective, of course, is to talk up the market for investors while warning the Government off doing anything radical, or anything that might upset the current price dynamics.
The upshot is no change or at least a continuation of what we’ve had since the 2008 financial crisis: housing dysfunction on a grand scale combined with irrelevant or counter-productive government policy.
The latest report from property industry body Irish Institutional Property (IIP), whose members include most of the biggest property firms and landlords in the State from Cairn Homes to Ires Reit, is a case in point.
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