Property Industry Ireland (PII), the Ibec group that represents the sector, today published its report, “Brexit and Ireland’s property sector”, that reviews the likely impact of Brexit on the Irish property market, including some significant risks, but also some opportunities. A hard Brexit could ultimately deliver a significant shock to the Irish economy as a whole, which in turn could undermine the performance of the property sector. Brexit may also bring new economic opportunities, which Ireland may not be fully able to benefit from due to infrastructure capacity constraints (see attached pdf for full details). To off set the risks, PII has proposed a series of actions, including taking additional steps to boost the housing supply, expediating vital infrastructure projects and companies diversifying into new markets beyond the UK to off-set Brexit risks.
Dr. David Duffy, Director PII stated: “Given the broad nature of the property sector it seems likely that in the short-run we will see mixed impacts. Some parties could see an upturn in activity as UK firms look to locate some of their activities here, while others will see a negative impact on their trade with the UK due to a weaker sterling. Our concern is that in the longer run any negative impacts on economic activity will feed through to the property sector.”
The report outlines that opportunities and challenges arising from Brexit include:
- · Higher FDI flows represent opportunities in the short run;
· Rising prices and rents may affect competitiveness;
· Weaker sterling will impact on exports of building materials;
· Investment in all types of infrastructure will be required to meet the demands from higher FDI inflows;
· Lower economic activity levels would impact on the property sector;
· Availability of property may act as a constraint.
In order to mitigate negative impacts, the report proposes policy measures, including:
- · Facilitate increased housing supply: PII urges the Government to implement measures to increase urgently both the supply of new homes and the number of properties in the private rented sector.
· Lower the cost of construction: Action needs to be taken to tackle construction costs. Priority should be given to reducing the impact of taxes and levies on the price of housing provision.
· Address infrastructure constraints: PII calls on the Government to establish a National Infrastructure Authority to independently prioritise essential infrastructure development.
· Regional development and spatial planning: Recommendations include planning reforms, investment in infrastructure, higher density and higher residential building height, and an expanded Build-to-Rent sector.
· Increased competition: Companies need to look at alternative markets to the UK. Firstly, to prepare for more difficult access to the UK market and secondly, to be ready to face increased competition from UK firms looking to service their European client base.
The report includes feedback from Property Industry Ireland members on their perception of the likely impact on the industry.
- PII Brexit Priorities Report.pdf - 4,879 Kbytes