Bear with me while I tell you a dinner party story - or more precisely a story about the stories that I keep hearing at dinner parties.

We’re all acutely aware of the challenging accommodation issues affecting significant sections of the population at the moment: from those who are homeless and waiting for social housing, to those who are forced to pay increasingly high rents, to those who are finding it difficult to secure a mortgage because of new Central Bank constraints.

At the core of the issue is the whole question of housing supply and the fact that we’re not building sufficient new homes – whether houses or apartments - to meet the needs of a growing population and to inject some liquidity into the second-hand market.

When we dig a little deeper, within the issue of supply lies the cost of construction. This is fuelled by factors such as the high cost of development land, the exceptions of land owners and developers that land prices will rise, planning constraints and the cost of building regulations and development levies.

Also at issue is the process by which banks issue loans for land and mortgages based on the most recent valuation of those assets rather than on more strategic, nuanced considerations such as average long-term prices, reasonable investment returns, population forecasts, planning requirements and forecast growth of the economy and in incomes.

Great expectations

Economist, David McWilliams highlighted this specific issue well in his column in Wednesday’s Irish Independent, under the broad theme of how great expectations on the part of many stakeholders in the housing market, are impacting on a dysfunctional housing market.

On that question of expectations, let’s get back to my dinner party story.

As is frequently the case with diners of a certain age and perceived social position, the conversation turned to the property market and the difficulties the offspring of two of the couples present were experiencing in sourcing their first home.

What quickly became clear in this instance, and in many others I’m aware of, was that the constraints at issue here were not simply of an economic nature, but principally arose from social expectations.

What am I going on about?  I’m talking about the seeming need of the next generation of some urban middle class families to acquire a residence in the same geographical environment as their parents and peers - and sometimes within the same postcode or even network of leafy avenues.

We’re not talking about the concerns many house buyers would have of investing and putting down roots in an area that appears alien to them in terms of its socio-economic profile; nor are we talking about far-distant communities that necessitate time-consuming and expensive commutes, as fuelled many of the ghost estates of the boom.

We’re talking about buyers who won’t countenance buying their preferred type of house, in their preferred type of suburb, with their preferred type of community and schooling infrastructure, in a different part of their own city.

Home comforts

To boil it down, we’re talking about people on the south side of Dublin who would never consider moving to similar areas on the north side even though it’s a relatively short car, bus or taxi trip away and comparative prices may actually be significantly cheaper.

This phenomenon also applies, though I suspect not as frequently, to northsiders who don’t wish to cross the river to live, and to an even lesser degree in other urban centres.

In the scheme of things, this artificial constraint within the housing market is not a major issue, but it’s a very irritating one.

Next time you hear certain parties talking about the difficulties of the market, you might check whether the problems are real and structural or more of the ephemeral kind, built on social expectations.