Property
Irish home ownership to fall due to affordability
By Michael Hennigan, Finfacts founder and editor
Nov 26, 2014 - 9:07 AM

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The Irish home ownership rate is set to fall according to the National Economic and Social Council (NESC), an agency comprising representatives of economic and social groups in the economy, which advises the Government.

The NESC says in a report submitted to the taoiseach that  many families “will have little chance of buying their own home” and will have to turn to social housing or rental properties in future.

The Irish Times says today that these include those on lower incomes, single earner homes, single parent homes and single person households. Research carried out for the introduction of water charges showed about one-third of households were single adult dwellings.

Based on OECD data, home ownership is at about 75% of dwellings and is at one of the highest levels in Europe but behind Spain.

In contrast, only about 43% of Germans have their own house or apartment and this is partly due to the fact that the German government provides for affordable social housing, but mainly because private rents do not rise with inflation. In addition, Germany has a strict landlord-tenant law that protects the interests of tenants.

After reunification house prices were kept under control by increasing supply, incentivised by generous tax incentives.

Ireland has one of the highest rates of owner-occupied dwellings without a mortgage - at over 40% compared with 12% in Sweden and below 10% in the Netherlands.

The Irish Times says Alan Kelly, environment minister, will announce this morning that 90,000 households will “have their housing needs met” by 2020. "In setting out his social housing strategy, the minister will announce a longer and more ambitious strategy than previously signalled."

The NESC will publish its report, 'Home Ownership and Rental: What Road is Ireland On?' in coming weeks.

The leaked extract says that a number of past policies – such as local authority loans, mortgage interest tax relief and tenant purchase schemes – gave Ireland one of the “highest rates of home ownership in recent decades.”

“The increasing share of rental accommodation partly reflects the removal of these supports for home ownership and reduced provision of social housing. There now needs to be a systemic and honest exploration of aspirations, goals and possibilities for home ownership.”

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