THE housing market needs to face up to a new reality and clear existing housing stock, according to a leading authority on sustainable communities at a meeting of the the Urban Land Institute (ULI) last night.

John O’Connor, CEO designate of the Housing and Sustainable Communities Agency, told the first ever ULI gathering in Ireland that if stock was sold at prices that allowed it to clear, or rented long-term, the market could start to function again reasonably quickly within two years, particularly in urban areas.

He said existing vacant new housing stands at around 33,000 nationwide which is equivalent to around one year’s demand but is acting as a big drag on the market.

Describing the market as effectively stuck in limbo, he said people are fixated on house prices “and how much they have dropped and when they are going to to bottom out, but we need to start a new market and ask what is a house really worth in terms of what people can afford”. He says the banks, developers and Nama are still focused on short-term returns but to create a stable market we need to be realistic and look long-term, “renting property over the next 15-25 years. We can’t sell assets if the money isn’t there to buy them”.

The ULI is a global non-profit education and research network with over 30,000 members worldwide which has recently set up in Ireland.

Organiser of the event, Gary Corrigan, development manager with Treasury Holdings, said the current lull in construction is a good time to learn from the planning mistakes made during the period of frenetic building.

Corrigan says he made this comment wearing his “ULI hat” rather than his “Treasury Holdings hat” and that a lot of people, including developers, are going to use this is as an opportunity to reflect.

“Good planning for sustainable urban communities offering high quality of life must shape the property market into the future,” he said.