ESRI: Fall-off in house building could damage economy

The Government's Economic and Social Research Institute (ESRI) has warned that a sudden reduction in house building could have a devastating effect on the Irish economy.

In its latest quarterly economic commentary, the ESRI predicted GDP growth of 5.5% next year.

However, it warned that this rate could be reduced by three percentage points and 50,000 jobs could be lost if house-building was halved from its current level of 80,000 units annually.

ESRI economist Danny McCoy said this was unlikely to happen, but action should be taken to prevent the economy from being exposed to such factors.

"Issues like tax relief on property investments, stamp duty changes to favour second-hand homes and so on are all favourable in that regard," he said.