Finance | Extent to which rising housing costs continue to impact the cost of living

To ask the Minister for Finance the extent to which housing costs here continue to impact on the cost of living; the degree to which any provision can be made to offset the inflationary tendencies; and if he will make a statement on the matter.

REPLY

My Department continues to monitor all aspects of the property market, including the rate of inflation in the housing market, on an ongoing basis. According to the most recent figures released by the Central Statistics Office, the National Residential Property Price Index increased by 15.2 per cent in the twelve months to March 2022. The Consumer Price Index also shows that private rents have increased by 11.2 per cent in the twelve months to May 2022.

Many of the factors explaining the current high inflationary environment are not within Ireland’s control. These include the inflationary impact — via energy prices —  of Russia’s unprovoked invasion of Ukraine; the impact of a rapid rebound in global demand post-pandemic; and blockages in global supply chains affecting the availability of key inputs.

The Government’s primary response to mitigate residential price inflation has been to increase supply with recent data providing encouragement in that regard. In the twelve months to April 2022, 32,456 new homes were commenced. Moreover, in the twelve months to end Q1 2022, there were 44,491 units granted planning permissions nationally.  

In addition to increasing the supply of homes in general, more work needs to be done to increase the supply of social and affordable homes. In Budget 2022, €4 billion was allocated towards housing, including capital funding of €2.58 billion, a large proportion of which will be used to deliver 9,200 new social homes. Under Housing for All there is a commitment to invest over €4 billion in housing per year to 2030.

Housing for All targets the delivery of over 90,000 social homes, 54,000 affordable homes for purchase or rent, 18,000 cost rental homes and 170,000 private homes by 2030. Achieving these targets will make a real difference in improving affordability for our citizens.

In addition to these measures taken in the housing market, a package of measures totalling €2.4 billion has been introduced to ease the impact of the rising cost of living on our citizens. These measures include tax and welfare changes; a reduction in the excise rate on fuels; a VAT reduction on the supply of gas and electricity; a temporary reduction in public transport fares; and other measures. All of these measures highlight the need to take a multi-faceted approach to increase the supply of new housing and I will continue to work closely with my Government colleagues to ensure these targets are delivered.