EY: ‘Housing pressures set to persist’

The housing market is likely to see continued “significant” pressure for the next couple of years, despite ambitious promises by the major political parties during the general election.

That is according to EY, which — in its latest economic outlook for Ireland — said that the high cost of renting coupled with a scarcity of suitable accommodation “makes the go-to solution of accelerated migration more challenging”.

The three main political parties recently promised between 100,000 and 200,000 new homes over the full-term of the next Dáil.

However, in its latest economic commentary last week, the Central Bank said reaching 34,000 new housebuilds per year is achieveable but only over the medium-term of 10 years. It also said it expects Irish GDP to grow by 4.8% and 4.2% this year and next; down from an estimated 6.1% in 2019.

EY remains less bullish on the Irish economy, but still expects it to grow by 3.4% this year — up from its previous estimate of 3%.

However, it envisages growth to moderate to 2.8% and 2.7% over the next two years respectively.

“Regardless of the shape of the next government, we are likely to see a focus on public services, quality of life and what can be characterised as more internal, or personal, outcomes, rather than a singular drive for growth and globalisation,” said EY Ireland chief economist Neil Gibson.

“The contrast between economic growth and election results is striking as the incumbent government could not secure a majority with headline growth rates of well over 5%,” he said.

EY said it sees job growth to continue, but at a slower pace — with 192,100 jobs to be added across the island over the next five years, and the ICT sector set to be the greatest job creator.

It has also urged vigilance over Brexit.

“Hopes for a free trade agreement are high, but firms still need to plan for the potential practical outcomes that translate that into trade reality,” said EY Ireland’s Brexit lead, Simon MacAllister.

“Adaptable plans, nimble and flexible supply chains and efficient systems remain the order of the day for Irish firms in preparing for a post-Brexit island,” he said.