How come there are not enough houses all of a sudden, where did all the people needing housing come from.
It's not sudden, it's been known about for a long time. The rate of new house completions dropped off a cliff in 2008, whereas the number of new households being formed continued more or less as normal. The number of people renting in Dublin increased by a factor of several over the period since then, and the purchase price and rental increases we are seeing are the result of that.
We now have the crazy situation where we have a dire shortage of houses after the biggest property crash in history was caused by oversupply in the wrong places. The government has sat on its hands while developers claim they can't build houses at a profit and/or can't get credit from the banks. The same banks are rubbing their hands as the housing shortage lifts prices and allows them to shunt non-performing mortgages from defaulters on to new buyers, meanwhile restricting the supply of credit to builders and repossessed houses to the market.
The government, for its part, is colluding in all this -- giving income and capital gains tax breaks to buyers, and hiking taxes on savings, in order to entice money into the market. One wonders what, if anything, they have been doing to address the real problem for the last two years. One thing they're
not doing is improving developers' margins by reducing the government's sizable take in taxes and levies from every housing unit built. Unbelievably, they seem to think that house price increases are a good thing, judging by explicit statements from the finance minister although he seems to have disowned his own words when pressed on it. What, also, have the planners been doing, who gave us all the bubble properties in the wrong places?
I'd say anyone who hoped to buy a reasonable living space in Dublin in the next ten years can forget about it. When Dublin prices reached their nadir about two years ago, I reckoned prices needed to fall
another 50% to give reasonable comparisons to equivalent European cities. Not a snowball's chance in hell of that happening now.