The Irish housing crisis will reach a tipping point, as frustrated renters will begin to vote with their feet, one housing expert has said.
Josh Ryan-Collins, head of research at UCL’s Institute for Innovation and Public Purpose, and author of Why Can’t You Afford A Home? visited Dublin this week to discuss the housing crisis, and the impact of land inflation on rents and house prices.
“Everyone has a right to a home, that should be a non-negotiable,” Mr Ryan-Collins said.
“I don’t think Irish people should give up hope, I think we’re getting to a critical point where young people who are feeling that they are never going to be able to buy a house, they’re not going to put up with that.
“There’s going to be unrest, and change in the electoral arithmetic eventually, whereby there will be enough non-home owners voting for a party that says they will provide affordable rental or public housing so that you can live in a more sensible way, where you’re not spending more than half your wages on rent every month.
“In London for example, that tipping point has almost been reached, where there’s almost a majority of people renting.
“For homeowners who have kids, they can see their kids aren’t going to be able to own a home, and that is quite psychologically difficult, you want your kids to have the same opportunities you had, and there may be a case of those voters changing their mind and voting pattern too.”
CSO data released last week shows that average house prices in Dublin are now between nine and 14 times the average salary.
Property prices nationally have increased by over 80% since their lowest point during the recession in 2013.
In the capital, prices have risen over 92% since February 2012.
Mr Ryan-Collins attributes the increase to foreign investment, and lack of social housing pushing more people into the rental market.
“The Irish market has bounced up so quickly post crisis, because you’ve had a flood of institutional investment, much of it foreign, going into the housing market and ramping up housing prices and rental sector,” Mr Ryan-Collins added.
“People who would’ve been in social housing are being pushed into the rental market, and therefore with lack of affordable accommodation, it’s ramping rents up.
“The standard argument is that we’re not building enough houses for demand, it’s the same in almost all countries, but if you look at house prices over time, you find that they went up at a similar time in the early 2000s.
“Given all the differences in countries, the common factor is the supply of finance and credit in housing, banks are expanding their mortgage lending at a much faster rate than their business lending.
“When the bank makes a loan, it increases lending supply, and when that flows into a finite resource, like land, the result is going to be inflation, it’s a demand explanation rather than supply.
“The solution to that is to prevent so much credit flowing into housing and land, and providing more affordable housing, which requires the government to be a lot more proactive in shaping the land market, rather than saying the private sector knows best.
“It’s a political will issue.”
Sinn Féin Housing Spokesperson @EOBroin is hosting a conference in Dublin today on affordable housing.
Housing affordability is one of the key issues facing many low & middle income households. pic.twitter.com/7v27esjw8y— Sinn Féin (@sinnfeinireland) April 15, 2019
Mr Ryan-Collins was invited to Dublin by Sinn Féin’s Housing Spokesman, Eoin O Broin.
Mr O Broin has been a vocal critic of the government’s housing policies, which he says has directly resulted in what is now the highest number of homeless people in the history of the state.
There are now over 10,000 people homeless in Ireland, one in three homeless people are children.
Sinn Féin have been enjoying some success in the area, as the Financial Services Union (FSU) has come out in favour of the party’s bill that would prevent banks from selling home loans to so-called vulture funds without borrowers’ permission.
- Press Association