THE GOVERNMENT COULD help to solve the housing crisis if it borrowed an additional €4 billion to €7 billion a year, the ESRI has said in a new report.
The Economic & Social Research Institute said that Ireland faces another ten years of rising prices and rents without a ‘significant’ amount of spending in building homes.
The average rent in Dublin is currently just under €2,000, while house prices in Ireland have risen by 4% over the last 12 months.
The report, published today, says that Covid-19 has had a hugely negative impact on the supply of homes in Ireland, and notes that a ‘significant’ increase in publicly funded housing is needed to bridge the gap between the actual supply levels and the demand for housing.
It noted that the Irish economy is forecast to do well post-Covid, and given the low cost of sovereign debt, borrowing money for housing could be both ‘prudent and sustainable’.
The author of the report, Kieran McQuinn, said, “While there are many pressing demands for additional State capital investment in residential construction, we risk experiencing another decade of inadequate housing supply and resulting upward pressure on residential prices and rents.”
The government has made a number of tweaks and changes to housing policy in recent weeks, including a proposed update to the Local Property Tax regime announced yesterday, which will see just over a third of people seeing an increase in the amount of LPT that they pay.
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