Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The Department of Finance continues to monitor developments in the construction and housing sectors with a view to identifying potential macroeconomic risks. The biggest such risk is a continuation of the present situation, in which supply falls significantly short of demand, estimated to be in the region of 30,000 units per annum given our current demographic projections. Yes, I see the current situation where there is a significant shortfall versus supply. If it were to continue in the future it would be a risk which is why we are taking steps to address it. The reason for this is such a shortage would increase affordability pressures, would affect our competitiveness and would harm our ability to create and retain jobs, in addition to the significant social pressure and the huge damage it would cause to our society. Due to the seriousness of the issue, housing supply is specifically listed as a domestic macroeconomic risk in the stability programme update. As such, it is accorded the highest priority within my Department and in government more generally.

In response to this challenge, and in addition to the measures implemented under Rebuilding Ireland, Budget 2018 contained a number of initiatives aimed at increasing supply. Home Building Finance Ireland, HBFI, will boost the supply of debt funding to residential development. Budget 2018 also included an increase in the vacant site levy in the second and subsequent years of vacancy. In addition to all this, total expenditure on housing, both current and capital, has more than doubled in the period 2016-18 from just over €800 million to over €1.8 billion, which is an increase of 125%.

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