Cairn Homes chief executive Michael Stanley's reported assertion in a meeting with housing officials that Ireland had an international reputation as a country that doesn't support builders must have left them speechless.
The building sector – or more accurately the developers such as Stanley and his peers – have been among the most supported sectors in the Irish economy over many years.
Part of the reason we have the current distorted housing market is precisely because of some of the incentives put in place to increase housing demand instead of addressing the critical issue of housing supply.
Help to Buy is but one example of a recent policy measure and the irony is that Stanley's comments are reported to have come in the context of lobbying for the next artificial inflation of demand in the sector – the Government's proposed shared equity scheme. This has already been criticised by the Central Bank of Ireland and the Economic and Social Research Institute as likely to inflate prices, rather than making homes more affordable.
Central Bank rules
Alongside lobbying for the shared equity scheme, developers have been gunning to overturn Central Bank rules on mortgage lending put in place to prevent a repeat of reckless lending from banks to allow people pay for homes at prices inflated by demand that was exaggerated by the failure to address supply-side issues.
Only on Monday, a report in The Irish Times noted that it would cost at least €365 million – and perhaps over €1 billion – to fix Celtic Tiger-era building issues.
No one in the construction or the building supplies sector seems willing to acknowledge their responsibility in this situation. And, as the report noted, many of the companies involved in the construction of the properties concerned have been liquidated.
When it comes to Ireland’s builders, successive governments have consistently opted for short-term policy measures to ensure they are supported rather than facing the challenge of fundamentally lowering building costs and holding developers to account on building standards.
