Boom to Bust

Taoiseach says there's 'no evidence of a land bubble' in Ireland

Leo Varadkar said it is something the government will keep an eye on.

TAOISEACH LEO VARADKAR has said there is “no evidence of a land bubble” in Ireland.

His comments come after the Central Bank’s warning this week that the government needs to put buffers in place if Ireland is to avoid another boom-bust cycle.

This follows on from the OECD warning in May that there are signs the Irish economy is overheating.

When asked if he believed there was another property or land bubble taking hold, Varadkar said:

“On land bubble, I don’t. But I do think there is a lot of land that isn’t being made available for development quickly enough and that is why we brought in the derelict site levy for example.”

He added:

But I haven’t seen convincing evidence of a land bubble at this stage. But it’s something obviously we have to look out for.

The Taoiseach said the vacant site tax will make sure there is more land available for housing construction, while the setting up of the land development agency, which will have Compulsory Purchase Powers to acquire land and develop it, will also help.

Irish financial expert Paul Merriman issued a stark warning in June about the return of Ireland’s housing bubble.

“The housing bubble will burst and create another credit crunch. Housing stock is set to increase, but so will interest rates which will lead to many people being unable to afford their mortgage repayments,” Merriman said.

Varadkar said there is “still not enough” houses being built to stem demand, adding that the government plan to get more involved in the housing market in the months ahead in order to deliver on its targets.

“This year, we anticipate 20,000 new homes being built. That’s still not enough. So we need more interventions and this will be part of that, the Government getting much more involved in developing land for housing.”

While he said house-builds are increasing, it is “far short” of where Ireland needs to be. Other indicators are also not going in the right direction, he admitted.

“Those in emergency accommodation continues to track upwards… that is an area where there will be a huge effort in the autumn.”


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