EU report to focus on Irish home prices

An EU report to be published in late June will put a spotlight on increases in Irish house prices, according to Fine Gael MEP Brian Hayes.

He said a response from EU economics chief Pierre Moscovici has “confirmed” the Commission’s latest post-bailout surveillance report will put “a major focus” on Irish house prices.

“Commissioner Moscovici made it absolutely clear the Commission considers the rising levels of house prices in Ireland a significant threat to the stability of our economy, saying the report of the seventh post-bailout surveillance mission to Ireland will be published late next month,” said Mr Hayes.

“Housing supply will be a persistent problem for many governments to come and we need to use all the expertise we can get to resolve it.”

In the response, Mr Moscovici said the financial crisis “clearly demonstrated the severe social, as well as macroeconomic, consequences of allowing imbalances to emerge in the residential property market” and Irish house prices and the factors driving supply and demand were being watched.

“Ultimately, the only durable solution to affordability and the scarcity of housing is to build an adequate supply,” said Mr Moscovici. “As proposed by the Commission, the council therefore recommended that Ireland prioritise public investment in infrastructure, in particular transport, water services and housing as part of the 2016 European Semester.”

Recent CSO figures showed that the costs of buying a home climbed by an annual 9.6% in March.

On a regional basis, Dublin property prices increased by an average 8.2% and climbed 11.8% outside the Dublin region.

Davy Stockbrokers has forecast prices will rise by 10% through 2017, boosted by the Government’s Help-to-Buy scheme for first-time buyers and by the Central Bank’s loosening mortgage controls for borrowers.

Mr Hayes said: “We want a stable rental market into the future but that can only come about if we have a modernised housing market. The two work hand in hand.

“Mr Moscovici has rightly said that the only durable way to address the lack of affordable housing is to build an adequate supply. The government’s 2020 housing strategy is tackling this issue but it will obviously take time for new builds to be completed and to address persistent housing supply bottlenecks.”