CORK is in danger of becoming unattractive to employers and workers if the current housing shortages and rental market hikes are not addressed, a leading expert has warned.
New figures have shown that house prices in Cork city rose by 5% in the last year with the average house price now at €261,000, 59% above its lowest point.
In the county, house prices went up by 8% to an average of €207,000.
Rents have also risen by 11.4% in the last year, with the average rent in Cork city at €1,132.
The Economic and Social Research Institute (ESRI) has predicted that house prices will rise by a further 20% in the next three years.
“Cork has certainly had an interesting couple of year in terms of increases in rental and housing prices,”said Daft.ie Economist, Ronan Lyons.
“It’s very similar to Dublin and Galway in that there is a high demand for housing and there are Foreign Direct Investment hubs which are doing very well.
“However, there is also an acute shortage of housing,” he added.
“This could, in the future, have a huge negative impact on homelessness as well as from a social justice point of view.
“If this trend continues, Cork could find it difficult to attract people to Cork to work and eventually find it difficult to attract jobs,” warned Mr Lyons.
“There was recently a review from American companies including some based in Cork and they cited the lack of housing as a concern.
“This is a serious issue and certainly needs to be addressed,” he added.
While the shortage of housing in Cork is certainly an issue, Mr Lyons does not expect house or rental prices to increase drastically in 2018.
“I can’t see these prices going too much higher but that’s only because we’ve reached the limit of affordability,” he said.
“People won’t want to spend that amount of money so they’ll look for cheaper accommodation maybe further and further from the city.” There are four ingredients to prevent the housing and rental crisis in Ireland from deteriorating even further and ensure housing for homeless and employment sectors across Cork and the country, according to Mr Lyons.
“One is sensible mortgage rules, which I feel we have here in Ireland to some extent,” he said.
“However, in terms of the other three, I don’t feel we are close enough and that needs to change,” he added.
“One aspect we need to look at is efficient construction costs which the government certainly need to address.
“If you have construction work going on on apartment blocks and social housing, there are significant costs to many aspects.
“If we can lower these costs, construction can be increased,” he added.
“The rate of construction certainly needs to be sped up as I can’t see anything changing, certainly in the next two years, unless it does.” Social housing needs to be reformed in Ireland to ensure everyone can afford somewhere to live regardless of their income, according to Mr Lyons.
“If you look at some EU countries, we are behind in terms of what is being offered in social housing at affordable prices, it’s vital that people can afford housing no matter their income,” he said.
The importance of reusing land to create housing and rental properties cannot be overstated, he added.
“The reuse of land is crucial, I believe Cork is leading the way in this regard with plans for the old docklands which I’ve heard could reach around 40 stories,” he said.
“This is a great opportunity for Cork to redensify the city and ensure continuous growth of its population and workforce.
“Sites like old docklands, old army barracks and industrial estates need to be used for construction, they’re strategic sites,” he added.
“Dublin, for example, is a city with a population of 1.5 million yet no skyscrapers in terms of international standards.
“This has to change in the future in Dublin and cities like Cork and Galway,” added Mr Lyons.