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What would a triage approach to housing look like?

Property market commentary has taken quite a surprising turn in recent days. With data showing the current generation as the first in modern history to have lower standards of living than their parents, it is clear that something needs to change. But what?

If there was only one right answer, it would have emerged by now. The difficult reality is that the problem is more nuanced than the emotive stories of tenants and prospective home buyers would have us believe. And such a complex, nuanced problem demands a whole range of solutions. It is unhelpful to pit one solution against another when all are needed.

Bill Nowlan, who is often credited with introducing Reits to Ireland, articulates this well in The Irish Times today when he writes that “Reits are not the enemy and emotion is not a policy:
If we turn our back on them we better be ready for the implications of adding €20bn to our national debt”
. He correctly points out that the company whose purchase of houses in Kildare inflamed this particular outcry is not a Reit. While this is not really the point of the debate, it demonstrates how the media’s use of incorrect terminology like “cuckoo” or “vulture” funds is genuinely unhelpful and actually hinders the general understanding of how the market works and how the built environment is funded. This disconnect is further polarising the people who need housing and those in a position to provide it, which is nonsense. Clearly both have the same objective – the provision of housing. The longer this debate is allowed to continue, the further we are from the solutions being rolled out. And this delay exacerbates matters further. This week, new figures from the Central Statistics Office show that house prices are rising at their fastest rate in two years. Almost 87 per cent of this activity relates to second-hand homes. Rents are also increasing across the country. According to the Association of Irish Mortgage Advisors (AIMA), there is “a glut of homeseekers, particularly first time buyers, who have already secured mortgage approval and are waiting in the wings to purchase a home”, but the stock of properties available for sale is down 40 per cent year-on-year. “We really need the output of new homes to increase dramatically for the remainder of 2021 and well into 2022. Without a huge increase in the completion of new homes, we run the real risk of the increasing demand and poor supply driving house price inflation”.

The delivery of new homes has never been more important, and the urgency has never been greater. It simply is not worth the years of delay to debate the merits of whether social, private or affordable homes ought to be prioritised. Ideally, this delivery would be balanced. But the market is far from ideal, as is our policy-making. In the absence of ideal, deliver any homes first and let the others follow.  The market is a dynamic beast that will self-correct as it goes, but it cannot and will not sustain bad policy. Investors will not allow this to happen.  What Ireland needs is a triage approach to housing. In much the same way as a medical professional objectively assigns degrees of urgency to wounds or illnesses to decide the order of treatment, our housing response needs to objectively assess where the most damage is being done and address that. Political in-fighting and inflaming the nation is merely a distraction, albeit a dangerous one.

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group