Dr. Mark Cassidy:

I thank the Governor. Certainly, we have already seen a significant impact on the housing market. The Deputy will understand that as the construction sector was temporarily put to sleep as part of the public health guidelines, housing supply came to a standstill. We have seen a gradual return but the slowdown already witnessed will have an impact on housing supply this year. We will also not see the industry return at full capacity. Because of public health protocols on physical distancing, the capacity of the housing sector will be affected for a period of time. The length of that time will depend upon the duration of the virus and whether we see a resurgence and hence our two scenarios are also relevant in terms of what we estimate the impact on the housing market will be.

I will give some numbers. Before the virus, in our first quarterly bulletin of the year we were estimating that approximately 26,000 new housing units would be produced this year, rising to almost 32,000 in 2022. In our baseline scenario, which assumes that the economy continues to open up broadly in line with the schedule announced by the Government, we estimate housing output this year of only 16,000 units, that is, 10,000 fewer units than we were previously expecting. By 2022, the corresponding figure will be 22,000, also 10,000 fewer units. That means 30,000 fewer units in aggregate compared to what we were expecting prior to the outbreak of the virus under our baseline scenario.

The outcome would be considerably worse in the event of a resurgence. Our severe scenario assumes that there is some resurgence or so-called "second wave" at some point over the next year. In that case, housing output would be significantly affected in addition to the capacity constraints. In that case, housing output could be lower by the order of a further 15,000. We think, in fact, housing output in 2022 would only be approximately 15,000. To remind the committee of the previous figures, we were previously expecting 32,000 units in 2022. Under our baseline scenario, that would only be 22,000 units and under our severe scenario, that would only be approximately 15,000 units.

We are already in a situation where there is a material shortage of housing supply. That is the most important issue facing the housing sector. We estimate that we are well short of producing enough housing for medium-term requirements, so this will exacerbate the situation.