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House prices nationally have risen by over 85% since 2011 

An analysis by The Oireachtas Parliamentary Budget Office (PBO) has confirmed that house prices nationally have risen by over 85% in the last ten years while rents have doubled in price. 

The PBO also say that the Rebuilding Ireland scheme which provides a Government backed mortgage for first time buyers through local authorities has failed to meet its annual target every year since it was implemented in 2016 and was 41,000 units below its overall target. 

In the twelve months to July 2021, average construction and housebuilding material costs increased by 13.4%, while the average cost of construction labour has increased by 4%. 

The PBO says that construction inflation, at over 8%, has doubled since the onset of the COVID pandemic and is currently running at Celtic Tiger rates. 

In its summary of the Housing Market in 2021, the PBO also note that a decade of under supply has homeownership rapidly decline.  

On the supply side, the PBO says that the most notable issues preventing housing completions are skilled labour shortages, rising costs of construction, and supply chain disruptions. 

“The scars of the 2008 recession are starting to show as the number of people, particularity skilled craftsmen, working in the construction industry is just over half of its 2007 peak. COVID-19 health restrictions forced many factories to shut down or operate at reduced capacity causing output to fall.” 

“Potential homeowners can expect longer periods for completion because of the increasing pressure placed on the supply chains. The building boom has led to supply bottlenecks, delaying deliveries of essential resources and increased lead in times. The rapid economic recovery since lockdown has helped fuel demand expectations and created a prolonged period of high prices, as demand outstrips supply.” 

The current crisis has developed, the PBO note, despite the fact that Housing has been called the “single most urgent and important social issue facing our country at this moment in time” and after the National Economic and Social Council (NESC), urged “bold action… to fix our dysfunctional housing system” in November 2020. 

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