Housing: grasping the nettle, and a balanced approach to this week’s Covid review

May 26, 2021

The latest CEO Update to Ibec membership from Danny McCoy

Dear member,

The underlying strength of both our economy and society, in responding to post-Brexit turbulence or despicable ransomware attacks upon our nation’s health infrastructure, is displayed in adjustments in economic supply chains, continuity in all island networks and the ramping up of the Covid vaccination programme with strong citizen support. The structural pressures pre-Brexit and pre-Covid, however, remain.  

Our expanding population of 5 million people, the highest level in 170 years with a rising median age, meant that demand for household formations was always going to be high.  Housing demand continues to exceed supply exacerbated by the suppression of construction activity over the last year.

How we allocate resources to address the major challenges facing our society means prioritisation and trade-offs.   The scarce industry resources must be used to deliver new housing rather than being consumed by refurbishments and retrofitting.  Grasping this nettle requires a consistent application and policy environment for the allocation and sourcing of capital. This reality is key to the provision of high quality and affordable housing and will require cross-party political agreement on the priority for the allocation of capital. We know that pressure on housing stock will remain for at least two more election cycles and that business must lead on long term solutions.  Social dialogue is one mechanism through which a society can mediate these potentially competing priorities but knee-jerk populist policy reactions are ultimately unhelpful to the people they purport to assist. 

To help inform this debate, Ibec has published new research undertaken with Behaviour & Attitudes on a representative survey of 760 people on their housing demand. The full report can be found below.

Key findings from the research include:

- 33% would like to purchase a new home in the next two years but only 15% have the capacity to do so.
- Nearly one-third of renters see mortgage approval as a barrier to do so.
- Over 80% believe Government should introduce additional measures to improve the supply of affordable housing.
- 56% are in favour of the shared equity scheme, with 33% expressing some interest in availing of such a scheme. When the ‘don’t knows’ were excluded three out of four respondents were supportive of the shared equity scheme.
- Covid 19 has resulted in an increased importance of having a garden/outdoor space (65%).
- Over 50% of younger age cohorts would consider moving to rural areas for housing and quality of life factors.
- There are notable distinctions in social class grouping of ABC1 (higher income) having lower proportions of housing as opposed to apartment tenure but with a statistically much greater demand to purchase than C2DEF (lower income) groupings.

Better news on Covid from the vaccination rollout, has raised expectation of strong economic recovery in most western developed countries in recent weeks with strong evidence of shortages in material and high inflationary expectations.

The Government review of Covid restrictions later this week must continue to balance the risks from new variants and the necessary continuity of critical manufacturing and essential services with a focus on the how the Experience Economy and return to office can resume a phased reopening. The supports and guidance for outdoor dining in June and indoor by July need to be carried on. Return to safe, digitally certified international travel across Europe is critical. 

Both employers and employees need crisper timelines for proportionate office reopening beginning late June.  The role of antigen testing and ventilation are set out in the Return Safely to Work protocol supported by Ibec and ICTU working with the Government. The protocol can be sourced here. Appropriate caution, not an abundance of it, is required with new more transmissible variants that requires greater speed in vaccination rollouts and using serial testing into the Winter months.

As ever, please get in touch with me with any comments or suggestions.

Best wishes,

Danny McCoy

Housing demand - Research and Insights May 2021 pdf | 3858.1 kb