Sir, – It seems to me that the Government is trying to solve the housing crisis by manipulating the market instead of taking action on the real reason for the crisis.
The market is reacting to a shortage of supply. This is a simple supply and demand issue.
The lack of supply is causing rents to rise, albeit from a very low rate, to meet the ever-increasing demand, and so property prices rise.
The Government’s answer to this is to blame the landlord for raising rents, after years of dropping them, and put in some sort of control to prevent the market from finding its own level. This will have a reverse effect and remove landlords from the market and therefore reduce supply.
The Government also wants to control house price rises. This seems incredible, given the fact that you can still buy houses for less than you can build them. If prices are not allowed to increase, builders and developers will not be able to afford to build houses and sell them for a profit. This does not help the supply of houses.
The Government needs to lead by example and use some of the uneconomical land banks owned by the State, Nama or even the church to build high-quality social and affordable houses.
This will then free up private housing currently being used by the Government for social housing, increasing the supply of rental properties on the private market and helping to stabilise rents.
Surely the same argument that surrounded inflating the property market through loose financial control during the boom can also apply to deflating the market through tight, and badly thought-through financial control during recovery. – Yours, etc,
ANDREW PAUL,
Cabinteely,
Dublin 18.