Faster housing delivery could mitigate impact of tariffs
Faster housing delivery could mitigate the impact of tariffs, according to the latest report from Davy.
Updated forecasts from the Department of Finance show that economic growth will slow next year due to US tariffs.
Davy believe that this presents a compelling rationale for the Government to use all available levers to accelerate housing and infrastructure delivery in the near term.
Speaking on RTÉ's Morning Ireland, Davy's chief economist Kevin Timoney said that looking at the recent history of the Irish economy, "the best time to have built housing was probably about 10 years ago realistically."
"Now that we potentially have a slowdown in activity that creates a bit of capacity," said Mr Timoney.
"There's often concern that there wasn't the capacity to do all of the growth in the economy and to add to the supply side as well. We see that there's a good opportunity coming up now and that it would be a good, almost countercyclical time to do it when the the rest of the economy is potentially slowed from tariffs," he said.
Davy is also highlighting levers the Government can use to accelerate housing and infrastructure delivery in the near term.
This week the Minister for Housing James Brown said he is considering a report from the Housing Agency on potential changes to rent pressure zones.
The report examines the options available to Government including removing rent caps, retaining the existing ceiling which limit increases to 2% or adjusting the existing limits.
Mr Timoney described the ongoing review of rent pressure zones to open up increased supply, lowering construction costs and potentially looking to do further reforms in terms of planning as the three key areas to be looked at.
"I think in the near term there could be a boost to housing output anyway, we did see a big increase in commencements last year. These have been somewhat discredited because there were some subsidies at play and maybe not all of the commencements will be built," he said.
"But even if some of them were built, that would still imply a good boost to housing in the second quarter of this year so it'll be interesting to see whether that takes place," he added.
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