The Minister for Housing has said he ‘closely watching’ the housing market amid concern there will be a spike in property prices next year.

It comes amid reports that many prospective home buyers have been able to save significantly more than normal this year as a result of the coronavirus.

It emerged last week that an extra €1.7bn was deposited in Irish savings accounts and credit unions in October.

Meanwhile, a record number of mortgages were approved in October.

On Newstalk Breakfast this morning, Housing Minister Daragh O’Brien said he is ‘closely watching’ the situation.

“In certain sectors it has been a really tough year for our people but in some instances, people have been able to save more,” he said.

“We have got to make sure that, where people are saving for homes and looking to get back into the market, that that does not drive house price inflation.”

Supply

He said the best way to bring down prices is to increase supply.

“I commissioned research with the ESRI, the details of which will be published very shortly, which shows that really we need about 33,000 homes per year for the demand to be met with supply,” he said.

“So, there is always going to be pressure on price in certain areas until that demand is met by supply.”

Minister O’Brien said the Government was also investing in a number of affordable housing measures, including the Affordable Rental Scheme, the Affordable Purchase Scheme and the Rebuilding Ireland Home Loan.

“There are things the state can do to help but fundamentally, we have got to make sure that we keep increasing that supply to meet the demand that is there for people to own and buy their own homes,” he said.

Social housing

He said the Government still aims to increase the social housing supply significantly in 2021.

“9,500 new builds next year in social housing would be unprecedented and we will deliver in total, including builds and leasing, just under 13,000,” he said.

“We want to be able to do that over the coming years as well to make a real impact on the shortage of housing for our people.”

Minister O’Brien said he was “disappointed” with Dublin City Council’s decision to reject the proposal for the redevelopment of the 42-acre site on Oscar Traynor Road in the city.

Developer Glenveagh Homes had hoped to build more than 850 homes on the site – with half of them to be sold on the private market.

“I don’t think we have the luxury of continuing debates back and forth between councillors on ideological grounds on what type of housing should be built,” he said.

“Our people want homes.”

He said he hopes a revised proposal can be agreed in the coming weeks.

You can listen back here: