Stephen McNeice
Stephen McNeice

12.46 28 Jun 2021


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Ireland is heading towards another massive housing crash due to "utterly unsustainable" house prices, Irish academic Dr Rory Hearne says.

Dr Hearne - Assistant Professor of Social Policy at Maynooth University - says things have gotten so bad the Government needs to look at emergency action such as freezing house prices.

He was speaking as the latest figures from Daft.ie show house prices have risen by 13% nationally over the last 12 months.

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Report author Ronan Lyons said some of the increases "are more or less unprecedented in 15 years of Daft reports".

On The Pat Kenny Show, Dr Hearne said house prices are now "very close" to where they were at the height of the Celtic Tiger boom.

Housing market crash inevitable due to 'utterly unsustainable' prices - Rory Hearne

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He said: “When you think back to that pre-crash of 2005 and 2006, when house prices were rising… there was an expectation it was going to continue. We saw a massive crash that devastated our economy.

“My worry is we’re heading down that same road again. These prices are increasing at utterly unsustainable rates.

“The problem is prices could rise for another 2-3 years, but it’s inevitable we’re going to see another crash in house prices."

'Social catastrophe'

The Maynooth professor described the situation as a "social catastrophe" - with some people even talking about emigration as prices are so unaffordable here.

He said the last 30 years has seen a 'boom and bust' trend in the markets, and a major change in approach is now needed.

He argued: “We could be at the point where the Government needs to do something like freezing house prices - I think we’re at that point.

“There is a need for some emergency intervention from the Government. We had it in rents, with the rent [pressure] zones… where you can only increase rents by a certain amount in certain areas. Why can’t we do that with house prices?"

“Existing second-hand homes would have the immediate freeze, but new house prices you could work out something else [that] takes into account increased [building] costs.”

Another suggestion is to 'fast-track' the delivery of NAMA housing, with Dr Hearne suggesting the agency could deliver 20,000 units of housing in the next year if instructed to do so.

For Dr Hearne, the market is “utterly broken and dysfunctional” right now, and it would be a good thing for the State to undercut the market to deliver affordable housing.

He said he's "banging his head against the wall" that the problems aren't being addressed.

He said: “There seems a real unwillingness and almost apathy within the Department and Government… of really getting to grips of how you could provide a supply of affordable housing.

"I think a lot of it goes back to their obsession with the market… they’ve been completely bought over by ‘the market is the only way to deliver housing’.

“The fire we’re in now has been burning for a decade, and the Government did nothing to pour water on it.”

Main image: File photos of Rory Hearne (Photo: Leah Farrell/RollingNews.ie) and houses in a housing estate (Photo: Eamonn Farrell/RollingNews.ie)

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