After Ireland’s spectacular housing crash over a decade ago, the building industry was extremely slow to reconstitute itself. Since then, Ireland has also been bedeviled by shoddy building practices. A lack of regulatory checks on concrete blocks means that a decade or more of buildings repaired, expanded, or built in the northwest of Ireland are falling apart and threaten to collapse on their occupants. The scandal is going to cost the government billions and will soak up resources that are desperately needed to build more new housing.
And now, land with permission to build is so rare that the home-building firms are starting to become more like land-value-speculation firms. That is, their specialty is acquiring expensive land and selling it when it becomes more expensive. The home built to make the sale is more of an afterthought. These firms restrict supply into down markets. Every turn of the housing market in Ireland works like a ratchet, pushing prices of land upward, squeezing the quality of the material in the construction, and driving the percentage of income Irish people must devote to their mortgage ever upward. The government’s only response is the one you would expect: subsidies for first time buyers, which are immediately priced into the market and recouped by owners as profits.
Then today comes the headline: “State may need to limit home-building to just 21,000 units a year to meet climate targets.”
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