Varadkar allays fears of ‘land bubble’ amid home price rise

Leo Varadkar has insisted there is no evidence of a ‘land bubble’ amid increasing home prices but said the Government is monitoring the escalating cost of property.

Varadkar allays fears of ‘land bubble’ amid home price rise

Leo Varadkar has insisted there is no evidence of a ‘land bubble’ amid increasing home prices but said the Government is monitoring the escalating cost of property.

His comments are in stark contrast to a number of recent reports which warn of a ‘bust and boom cycle’ and wider concerns around a potential development land price or property bubble.

Mr Varadkar outlined measures taken to ease the housing crisis. He said the Government is now “getting much more involved” and this is evident from the proposed land development agency which will have compulsory powers to buy sites.

There has also been a 75% rise in the number of new homes built over the last two years, he said.

“This year, we anticipate 20,000 new homes being built. That’s still not enough. So we need more interventions and this will be part of that, the Government getting much more involved in developing land for housing.”

Asked whether there is now the prospect of a property or land bubble, Mr Varadkar said:

On land bubble, I don’t. But I do think there is a lot of land that isn’t being made available for development quickly enough.

"That is why we brought in the derelict site levy, for example, and the vacant site tax to make sure there is more land available and is also why we are setting up the land development agency which will have CPO powers to acquire land and develop it.

“But I haven’t seen convincing evidence of a land bubble at this stage. It’s something obviously we have to look out for.”

The Central Bank this week warned the economy risked overheating and entering a ‘boom-bust’ cycle.

In May, the OECD said there were signs of overheating and it warned of a fresh housing bubble in the event of no cooling down in house price growth.

Data published by the Central Statistics Office also showed residential property prices were increasing at 12.4% a year.

Cork developer Michael O’Flynn recently told a conference about land “being sold for far more than it is worth”.

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