Housing is one of the big themes in the news this morning as some of the political parties accuse each other of untruths about the size of the housing waiting lists. The row coincides with the publication of a major housing policy report by the Society of Chartered Surveyors. It contains short and long term recommendations for dealing with the current housing crisis. One of the main recommendations is the establishment of a National Housing Authority.
DCU economist Tony Foley, who authored the report, said a central point for the coordination and implementation of housing policy was badly needed. "There are four major areas of social policy - health, housing, education and welfare. Three of those areas have strong national coordination through government departments. Housing doesn't even appear in the name of a department of government, yet it's an area that's crucial in terms of the requirements of the population," the economist stated.
Mr Foley pointed out that the Government's Housing 2020 policy said there was a need for a more controlled view of how housing policy should be implemented, but that was still missing. A National Housing Authority could rationalise the existing structures, he suggested, while assessing needs nationally and identifying constraints.
Today's report also points to the high cost of building houses here, particularly in the lower priced end of the market.
"It costs about €226,000 to build a modest house, excluding the land costs. A huge element of the cost of a house is related to VAT and development levies," Mr Foley explained. He said there was limited scope for reducing the cost of construction. "You can't reduce labour costs - there's no mechanism for paying workers, say, 10% less. Materials are determined by market forces," he said.
"The main area for discretion is productivity and efficiency, and then there's the Government element, which is a significant part of the cost. 13.5% VAT adds several thousands to the cost of the house. There are the development levies and the 'part 5' social provision. All of that adds up to a huge price," the economist said. "If the Government is serious about reducing the cost of building, it controls a significant part of the final price to the consumer," he concluded.
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MORNING BRIEFS - A bigger than expected drop in the value of Chinese imports in the month of August has contributed to further concerns around the performance of the economy there. Imports were down around 14% in the month - reflecting both a drop in commodity prices and also the slowdown that is taking hold in the economy. The value of exports was down just over 6%, which still leaves a fairly sizeable trade surplus. The import figures will worry investors in particular.
*** The fallout from China is continuing to cause ripples further afield. Business confidence in Australia hit its lowest level in years, according to the latest reading from National Australia Bank's monthly index. It dropped from a score of 4 to 1 in the month of August. Recent market turmoil and broader concerns about Chinese growth, global trade and commodity prices contributed to the fall in confidence.
*** Japan's economy contracted slightly less than originally thought in the second quarter, according to revised growth figures. The economy shrank by 0.3%, compared to an original calculation of 0.4% contraction, and beating estimates of a 0.5% slippage. The figures come as prime minster Shinzo Abe secured a rare second consecutive term in office. Mr Abe's name has become synonymous with the stimulus efforts he introduced to try to revive the fortunes of the Japanese economy.
*** The boards of Paddy Power and Betfair have reached agreement on the terms of a recommended all-share merger of the two companies. The merged entity is to be called Paddy Power Betfair and will be one of the world's largest public online betting and gaming. The merger will result in Paddy Power shareholders owning 52% of Paddy Power Betfair and Betfair Shareholders owning 48% of the new company.
