The latest signs from the housing market should worry the Government. On Tuesday, figures for residential planning permissions showed a 12.5 per cent year-on-year fall in the second quarter. Then yesterday the latest house price figures from the Central Statistics Office showed an annual rate of increase of 7.5 per cent which, while down on previous months, is still well ahead of growth in wages. Market experts believe that when demand picks up in the key Autumn selling season, price growth will remain high and could accelerate again from current levels.
The problem for the Government is that housing is a long game and the lack of progress during the last administration has left a difficult legacy. A range of measures have been announced late in the previous government’s term and since this one took office, but the planning permission figures show a sharp drop in apartment approvals and even a fall-off in new housing schemes.
Against this backdrop, this Government’s housing targets look about as realistic as the claims made in the run up to the general election that close to 40,000 homes would be completed last year. The continued lack of progress in apartment building, despite significant State supports, is particularly concerning,
There are, at least, signs of some urgency and a realisation of the interlinkages between water and power delivery and new housing development. Taoiseach Micheál Martin’s annoyance at the reaction of some local authorities to the Government’s new planning guidelines is understandable. Ultimately national and local authorities need to cooperate to accelerate delivery; we don’t have time for power struggles.
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The Coalition needs to be strategic in its response. It has to realise that its housing plan, due shortly, is a crucial document to put all the measures it plans in context. And that putting coherent longer-term policies in place is the vital factor. Urgency is needed for sure, but in housing, as we have seen, looking for quick wins is often likely to backfire.
