In a recent interview on RTÉ radio’s Morning Ireland, Dr. Ali Ugur, the chief economist at the Banking and Payments Federation Ireland, highlighted the shifting dynamics in the housing sector due to increasing interest rates. He noted that private investment funds are now reconsidering their involvement in the market.
Dr. Ugur indicated that this reconsideration could potentially open up more space in the housing market for other stakeholders. However, he also suggested that the government is likely to step in and partner with the private sector to address the growing demand for accommodation, including social and affordable housing as well as private owner-occupied segments.
Regarding house completion figures, Dr. Ugur mentioned that the majority of completions were in housing schemes, with apartments comprising 35 per cent of completions in 2023. He noted that building costs had increased since the pandemic but had recently started to decline, although they remained higher than pre-pandemic levels.
Dr. Ugur emphasized the need for a focus on “building better” to address affordability concerns, suggesting that high-density apartments could be an option, particularly in areas with limited land availability. He highlighted the significant growth in the economy and increasing population as factors driving demand for such units.
While acknowledging the progress made in housing supply, Dr. Ugur noted that there is still demand from first-time buyers within mortgage approvals data. He suggested that the government may need to risk-share with the private sector to ensure an adequate supply of housing in the future.
(Source: The Irish Times)
