A LACK OF affordable homes in Dublin could result in “unsustainable” commutes for house buyers pushed out of the capital, a new report has warned.
The Economic and Social Research Institute (ESRI) said lower prices outside Dublin and Central Bank lending rules may lead to long-distance commutes for many households.
The study of housing supply found that the difference between prices in the three biggest cities of the country and other counties has reached boom-time levels.
Dublin, Galway and Cork cities have recorded increases of more than 30% in pricing from 2013, compared to rises of less than 10% in many counties.
But the report found that increased prices in cities have not resulted in adequate supply in these regions.
In Dublin, for example, fewer than 2,500 units were built annually over the past three years.
The report noted that this was “significantly less than the quantity required to meet projected demographic change”.
Restrictions
Price increases in the capital stalled in 2015 but there was less evidence of slowing price growth in the surrounding commuter counties, the ESRI found.
The report said this may be a result of Central Bank restrictions on borrowing and deposit sizes.
It said new mortgage rules are less likely to be a binding constraint for house buyers purchasing cheaper homes outside Dublin.
The study said high building costs, planning regulations and a shortage of suitable development land could also be partly to blame for the lack of housing construction in the capital.
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