Leading economist tells Limerick event IDA is "intensely worried" over housing availability

A LEADING economist believes IDA Ireland is “intensely worried” about the lack of housing limiting its ability to bring new roles here.

Jim Power was addressing an event at the Clayton Hotel in Limerick, where he also questioned why the government is not “throwing everything” at tackling the housing crisis.

He also predicted house prices will not decline over the next 12 months – and Ireland is not in line to face a recession in the same manner as 2008, given the fact the banking sector is far less exposed than it was in the boom-years.

Mr Power was providing an economic forecast to invited guests at an event held by Nenagh firm SYS Group.

He said: “One of the ways I think about housing is that it is a key element of national competitiveness. The IDA [is] attracting foreign direct investment into this country. The IDA will not admit it because it doesn’t want to say negative stuff about Ireland that might damage its reputation. But the IDA is intensely worried about the inability of workers coming into this country to either buy or rent at affordable prices.”

The economist described a lack of housing as "the biggest economic, social and political challenge” Ireland is facing.

“I’m astounded at the inability of government to throw everything at housing. There is no silver bullet solution, a whole range of things need to happen. But the political, economical and social imperative of throwing everything at housing I just think is so strong, yet it’s not happening,” Mr Power added. “If they [government] ignored everything else and got housing right, it would solve so many economic and social problems.”

Despite a cost-of-living crisis, Ireland is not heading for an economic collapse similar to that experienced at the turn of the decade, he predicted.

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“In marked contrast to 2006 and 2007, the personal balance sheet is in good health. Savings are high. Personal debt is very low. Whereas back in 2006/7, it was the opposite. It provides a source of optimism and stability in the future. We aren’t going to get a banking crisis here. The public finances are still very strong and we have record household deposits,” Mr Power explained.

On housing prices – often seen as a barometer to the direction of the economy, the economist said: “I do not see the basis for a significant decline in house prices. I just think the economic circumstances which would create that situation I don’t believe are likely to happen.”

IDA Ireland declined to comment.