Economies are weakening - latest data. Markets start to think that interest rates are already too high
Would 50,000 units a year solve the housing crisis? Is that number possible?
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Solving the Irish housing crisis is, in principle, easy: just build 50,000 units a year until the word 'crisis' disappears from the headlines and public consciousness. Is that a practical, realistic proposition - for any government of any persuasion? Why not just do it?
Lots of trade data, particularly for exports, suggest that economies are slowing down. Irish exports are really hurting from the slowdown in general and the weakness in Pharmaceutical trade in particular. Far fewer people are getting Covid boosters.
The weakness (relatively speaking!) in corporation tax receipts is in danger of becoming a trend. We will know a lot more in a couple of weeks when the all-important November exchequer returns are published.
The European and Uk economies are moribund. They are at stall speed - it won't take much to knock them into recession. Markets are actively thinking about rate cuts happening much sooner than central bankers are saying is likely. One or two prominent commentators are beginning to flirt with the idea that central banks, particularly the ECB, are on the verge of a big mistake - keeping rates too high for too long
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Oh, just to say I completely agree with Chris on the five year interest rate forecast. Mainly because that was my prediction coming out of COVID and I’d love to be proven right about it! I argued the same factors will push rates down, aging populations and medical costs pushing growth down, and automation and globalisation eroding the cost base. They weren’t going away. But recently I had a bit of a wobble in confidence on the globalisation point with the geopolitical protectionist trends. But at the micro level, big businesses won’t be able to resist using the developing world sweat shops and there’s enough of them to supply the cheap labour whenever another falls out politically. So I see the downward pressure on prices returning.
Housing, that old chestnut.
We should be clear on what SF promised to do in the 2020 general election manifesto. They promised to build 100k houses over five years and budgeted €6.5bn to do it. €65k a house, allowing them to fund other promises.
Had they got in in 2020, and somehow managed to deliver on this promise, would it have solved the housing crisis? 100k over five years seems like a drop in the ocean given that we’re now talking €50k homes a year.
We are entering an election year where the government have built 30k houses last year, surpassing SF’s ambitions on delivery of homes. A record for the state. They cannot compete on price though! I wish I had access to SF’s builders.
If any political party claims to ramp up government house building, at the very least there should be scrutiny given to how long they expect the journey to the promised land to take (pardon the pun). It is far more likely that they will only get to their target rate of delivery by the end of their term in government, which is the case for the current government. And they’ll be going into the next election having missed their volumes targets.
SF can now go into the next general election manifesto saying they plan to build 150k homes over the next five years and to do it all the need is to not mess up what’s already in place for them to deliver it.