New ESRI research examines what factors influence housing supply in Ireland, Northern Ireland and the rest of the United Kingdom
The Economic and Social Research Institute (ESRI), in partnership with the Shared Island Unit in the Department of the Taoiseach, has published new research contrasting housing supply between Ireland, Northern Ireland, Wales, Scotland and England. The report compares and contrasts how differences across the housing markets, in key costs of production, the regulatory environment and economic dynamics, have impacted the supply of housing.
Across all housing markets, but particularly in the Irish case, the traditional financial sector is not able to provide the requisite amount of credit for the necessary level of housing activity. Consequently, increased Government investment in the form of expanding the level of social and affordable housing stock available emerges as a key factor across all markets.
The report highlights labour shortages in the construction sector as a key challenge for the expansion of housing supply across all housing markets discussed, in particular in the UK.
With regard to planning systems, the report highlights strong similarities across housing markets where Local Authorities formalise development plans based on a housing strategy that is conceived at a national level. The report therefore suggests a greater degree of aggregation and coordination may be more practical in devising and implementing such development plans.
In terms of how the residential land market operates, the report suggests that greater regulation in the provision of land for housing could help to reduce the role played by speculation in land prices, and hence lower the cost of a key factor of production.
Finally, the report highlights the adoption of modern methods of construction (MMCs) and the importance of training and educational schemes, across both the Irish and Northern Irish markets, as a means of improving productivity levels in the construction sector in meeting climate action targets and increasing housing delivery on the Island of Ireland.
Commenting on the report, one of the authors Prof Kieran McQuinn of the ESRI stated: “Comparing and contrasting the performance of different Irish and UK residential markets, amongst other issues, highlights the importance of continued public investment in the provision of social and affordable housing.”