Ireland’s housing crisis may be serious, but it is by no means unique. Many developed countries are also experiencing a similar situation for similar reasons.
This is especially true when we look at our closest neighbors: Northern Ireland, England, Scotland and Wales.
According to the Economic and Social Research Institute, which published just that, there are lessons to be learned from comparing housing markets on these islands.
Perhaps the differences are easier to see than the similarities.
One difference is the impact of the 2007 global financial crisis, which made the housing market feel more acute here than in the UK, due to the amount of property lending by Irish banks. Its legacy is still felt here in the form of constraints on the availability of financing for homebuyers and the construction sector in general.
However, the issue of funding availability is common across all five markets, although to a lesser extent in the UK. There are also common solutions. That is the expansion of government housing investment, which has been declining in all five markets since the 1970s and at least until recently.
There are two areas in which Ireland’s problems are unique and, to some extent, homegrown. The first is planning. The UK shares a similar master planning model, with significant responsibility for implementing the national strategy falling to local authorities. This is not surprising given our common history.
While everyone could potentially benefit from less planning devolution and at least better guidelines, Ireland could also reduce the need to allow third parties to participate in the planning process to some extent. There is a possibility of profiting from this. According to ESRI, Ireland appears to be an outlier within the overall European housing market. The Planning and Development Bill currently being passed by the Oireachtas (which, among other measures, limits the grounds for judicial review) should help in this regard.
The second area is the role that land price speculation plays in driving up home prices here. Similar to the UK system, we need better data on land prices and better regulation of the provision of land for housing, which could help reduce the cost of building land.
The solution to Ireland’s housing crisis does not lie simply in copying policies and practices from Northern Ireland or the United Kingdom. Rather, we have already done it too much and everyone finds themselves in much the same situation. But Ireland can learn something from the successes and failures of other countries in key areas such as planning and land management.