DUBLIN (Reuters) – Leo Varadkar will return as Irish prime minister on Saturday to again face the intractable housing crisis that cost him a full second term and made Sinn Fein clear favourites to unseat him in 2025.
Varadkar, prime minister from 2017 to 2020, will take over from Micheál Martin under a coalition deal struck between their two once sworn rival parties that may even see a recent finance minister appointed and a probable change within the foreign office.
Halfway through their term, the centre-right led coalition are still struggling to get on top of the housing affordability issue that led to a surge in support for Sinn Fein on the 2020 election and has handed the previous political wing of the IRA a consistent opinion poll lead of around 10 percentage points.
“Housing really sets itself apart in the intervening time by way of the problems which might be dominating,” said Theresa Reidy, head of presidency and politics at University College Cork.
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“The massive query is whether or not government housing policy can substantially deliver in the subsequent two-and-a-half years. Given the indisputable fact that housing is an endemic issue in Ireland, it’s totally hard to see that being the case.”
Varadkar, Ireland’s youngest and first gay premier, may even find one other familiar issue is his in-tray, the long-running dispute between Britain and the European Union on post-Brexit trade rules for Northern Ireland.
Basing his last re-election campaign on Brexit backfired and Reidy said the coalition’s regular management of COVID-19 and a bumper budget package in October to alleviate the worst of the associated fee of living crisis have done little to enhance their rankings.
Indicators on the crucial issue of housing supply are also “turning on the improper time from a political perspective”, said Goodbody Stockbrokers chief economist Dermot O’Leary, pointing to the reversal of an elusive jump in housing commencements amid cost inflation and labour scarcity pressures.
While completions, which collapsed a decade ago following a property crash, are set to rise by over a 3rd to twenty-eight,000 this yr, they continue to be in need of the greater than 33,000 the federal government says are needed simply to meet up with demand.
Most analysts now expect completions to fall in 2023 and the state’s inward investment agency again warned this week that housebuilding must speed up if the economy goes to maintain attracting foreign multinational jobs.
The left wing Sinn Fein, seeking to enter government on each side of the Irish border for the primary time and push for a vote on Northern Ireland leaving the UK, has based its attacks on the federal government almost exclusively on its housing policy.
O’Leary said the trends point to a continued rise in rent prices – already well past record levels – and further upward pressure on house prices, which earlier this yr returned to levels not seen for the reason that credit-fuelled peak of 2007.
“Those negative supply trends will change into more visible when the crucial time of getting re-elected comes about,” O’Leary said.
(Reporting by Padraic Halpin; Editing by Kirsten Donovan)
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