Vasileios Madouros: Enabling higher housing supply to bolster living standards, now and in the future
Remarks by Mr Vasileios Madouros, Deputy Governor of the Central Bank of Ireland, at the Housing Infrastructure and Planning Convention, Dublin, 26 September 2024.
The views expressed in this speech are those of the speaker and not the view of the BIS.
Good morning everyone.
Thank you very much for the invitation to take part in today's conference.
The theme of the conference – around housing infrastructure – is particularly relevant to the current challenges facing the Irish economy.
Overall, the economy has been performing well, despite a number of external shocks in recent years, amid an increasingly uncertain global environment.
Domestic economic activity has continued to expand, employment is at record highs and household incomes have grown strongly.
In that context, a key challenge for public policy is ensuring that our infrastructure keeps up with the pace of expansion in the economy.
And, within infrastructure, one of the main priorities from a public policy perspective is housing.
So, in my remarks today, I will cover our economic assessment of the key factors that will shape the housing system's ability to increase supply.
The scars of the financial crisis on the housing market
Before looking ahead, though, let me start by looking back.
Over the past two decades, the Irish housing market has undergone extraordinary volatility, having experienced one of the most amplified boom-bust cycles globally.
The financial crisis left persistent scars on the construction sector.
Many companies went out of business and many construction workers emigrated from Ireland following the crash.
This boom-bust cycle has had long-lasting implications for housing supply, with housing output as a share of national income in Ireland being significantly below the euro area average for a prolonged period (Chart 1).