For the first time in almost 10 years, the ESRI has used the ‘overheating’ word.
It will seem fanciful to many that so soon after a bust that forced hundreds of skilled construction workers abroad, and with unemployment above 7%, that anyone would be talking of an economy that could again be entering territory dangerously marked overheating.
Outside of sky-high rents, house prices and soaring insurance premiums, most signs show that prices across the economy are flat.
And what about all the external threats, including the UK government’s obduracy in driving a hard Brexit deal with Brussels oblivious of the needs of the Irish economy, north and south?
However, the thinking of the ESRI as outlined by research professor Kieran McQuinn is that recent experience of the boom turning to a disastrous bust is very recent indeed.
In the context of measures introduced by the Government to boost housing supply, Mr McQuinn suggests history should inform us about the dangers of incentives that can swiftly lead to undesirable outcomes.
He reminded us of the ESRI’s most-favoured policy prescription to solve the supply problem of too few homes being built: The imposition of a site tax to stop landowners sitting on land waiting for prices to soar.
Strange then that the Government has ignored this prescription and plumped instead for first-time buyers’ grants and proposed rent controls.
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