Housing Minister Simon Coveney has denied that Ireland is in the grip of a new “property bubble” despite concerns over rising house prices, and banks approving mortgage loans for twice the number of houses available on the market.
However, the minister accepted that there is a “mismatch” between housing demand and supply. He was critical of people who did not acknowledge reforms introduced by Government, especially those “wanting everything done yesterday”.
Reports yesterday suggested as many as 20,000 potential home buyers have local approval from banks, for mortgages amounting to almost €2bn in total.
However, just 10,000 homes are on the market.
This situation, and repeated warnings of spiralling house prices, has led to claims that the country is in the grip of a fresh property bubble, less than a decade after the devastating economic crash.
However, Mr Coveney told reporters: “We’re not in the middle of a property bubble.” He insisted: “What we have is a severe shortage of supply.
The problem here is we don’t have enough supply to meet that demand, and the way to address that isn’t to prevent young people, or not so young people, to get mortgage approval, it’s to increase supply, which is what I’ve been focusing on doing. It is working, and people are seeing more planning applications, more commencements, more completions, but it is going to take some time for supply to ramp up to where it needs to be,” he said.
Mr Coveney referred to a “mismatch” between demand and supply and repeated a list of new policies he has introduced in a bid to quell the linked difficulties of house prices, supply, and rental market.
However, stressing the “interventions” will take some time to affect the market, he said the reality is “you simply can’t build a house overnight” and criticised people for wanting reforms “done yesterday”.
“Of course there is a mismatch between demand and supply; there is in the rental market as well, which is why we intervened in the rental market, so I have intervened in the property market in multiple ways.
“There are multiple things happening here, but people want it done yesterday and you simply can’t build a house overnight,” he said.
During the lead-up to the last property crisis, the then Fianna Fáil-led government repeatedly insisted there was no property bubble.
Despite saying he is concerned about house price rises, Mr Coveney yesterday attempted to calm concerns by saying they remain 30% below boomtime levels.
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