Wednesday, 8 May 2019

Questions (164)

Pearse Doherty


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.