The aggregate supply response hardly suggests market failure

House completions may reach 100,000 - BoI

November 02, 2006 10:31

The housing market here continues to defy predictions of a downturn, according to the latest Bank of Ireland’s quarterly Irish Property Review. It says that 2006 looks set to become another record year for house completions, house prices and mortgage take-up.

However, the Review predicts that next year is likely to see sluggish price inflation due to a further deterioration of affordability on continuing higher interest rates.

The Review says that current estimations for house completions of 85,000 to 90,000 units is too low and it predicts that completions now looks set to reach 95,000 and could even go as high as 100,000. This figure would represent about 24 completions per 1,000 people, which the Bank says is an astonishing figure given that the EU norm is around five per head of population.

‘Few if any envisaged annual house completions of this magnitude, even given the recent surge in immigration and related growth in total population,’ commented Dan McLaughlin, Group Chief Economist for Bank of Ireland Group.

‘Clearly, there are no appreciable constraints on Irish housing supply, and although many may quibble with the planning process, and whether the distribution of new housing is optimal from a social perspective, the aggregate supply response hardly suggests market failure,’ he added.

… hardly suggests market failure???


God damnit.

Somedays I want to kill every economist in the world…

Except the political economists, o’course… :stuck_out_tongue: