Wednesday, 8 May 2019

Questions (164)

Pearse Doherty

Question:

164. Deputy Pearse Doherty asked the Minister for Finance the evidence to support the claims made in the stability programme update 2019 that there is a threat of an overshooting of housing supply; and if he will make a statement on the matter. [19506/19]

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Written answers (Question to Finance)

My Department estimates that the medium-term demand for housing is around 35,000 units per annum.  Over the period 2008 - 2018, an average of less than 15,000 units were built each year, resulting in a considerable level of ‘pent-up’ demand.  In order to satisfy this pent-up demand, housing output will need to be higher than the level of annual underlying demand for a number of years.

The risk of overshooting housing supply identified in the Stability Programme Update (SPU) is a more medium-term to long-term risk.  It relates to the possibility that housing output would remain at elevated levels for a period after all unmet demand has been satisfied.  The Deputy will be aware of the over-reliance on the construction sector in the first decade of this century, and the disastrous consequences of this. 

Finally, I would stress that the SPU highlights - as a more immediate risk - the potential for supply constraints to arise in meeting this level of supply and the impact that may have on competitiveness.