The burdens of the housing crisis continue to have an effect on everyday life. More homes are being built to slowly reach the immense demand for housing. In the month of March of 2019, more home were built than were sold.
Although more homes are being built, houses are still too expensive for an average couple to buy a first time home. Builders and developers are hoards land, and this keeps prices high. According to economist, Richard Curran, Ireland is headed for another crash. Curran believes there is a bubble in the housing market. Rents are rising too high while cuckoo funds are buying up too many apartments which causes first time buyers to be pushed out of the market. Furthermore, supply of housing is increasing but not enough to keep up with growing demands.
The number of homes are increasing, however these homes are not demanded. The homes built this year are too expensive and in inconvenient locations. Housing prices are likely to severely crash just as they did in the past. There are fewer homes being sold at less than €250,000. Prices of homes are increasing into middle and higher priced bracket. Combining this trend with the strict mortgage requirements even fewer potential buyers exist. Thus, the dysfunctionality of the housing market is only worsening because of the lack of accommodating less expensive. The market suggests dysfunctionality due to financial metrics of customer base, income after tax income levels, mortgage caps and the cost of building a house.
Although a crash is inevitable, Curran does not believe it will be like the crash of 2008. If prices begin to fall in Ireland it would not hit like the 2008 crash. Currently, we are not as over-borrowed. The biggest impact would be on how it would stop further developments of housing.
The largest issue would be social housing development if prices suddenly fall. Social housing is in highest demand. Also, due to the likely increase in populations living in cities promotion of higher density city. Most of the population growth will occur in Dublin. It is necessary to avoid further urban sprawl.
To solve the housing bubble, small part time land lords should be replaced by large scale professional land lords who would be committed for the long run and have money for an acceptable and sustainable units. The rental sector is increasing however, the housing stock is not suitable for long term family renters. Ultimately, supply of housing is increasing but is not meeting demands of affordable and sustainable housing.
