A new report suggests the Government may have to extend its Help-to-Buy scheme if it is to achieve its policy goals on housing supply and promoting home ownership.
In its latest economic quarterly, Goodbody Stockbrokers says an increase in unsold stock this year due to lagging house sales will trigger a slower rate of new buildings than previously forecast.
The report says that ending the Help-to-buy scheme this year as planned may be premature.
Goodbody also noted that despite large external risks in the form of slower global growth, trade tensions and Brexit, the domestic economy continues to grow rapidly.
It has maintained its forecasts for core domestic demand growth at 4.5% and 3.8% for 2019 and 2020, respectively.
The stockbrokers said the forecasts are underpinned by strong foreign direct investment flows, strong employment growth, healthy real disposable income growth and relatively supportive fiscal policy.
They also said that employment growth accelerated to 3.7% year on year in the first quarter of 2019.
This as the clearest signal that economic momentum was not stalled by Brexit-related uncertainties at the beginning of the year, they said.
But at the same time, Goodbody said that the prospect of a hard-Brexit has risen substantially.
"This would be the worse-possible outcome for Ireland and alter the short-term trajectory of the economy significantly.
The ESRI suggests a short-term hit of 2.4% of GDP, but we suggest that the risks are to the downside here," the stockbokers wrote in today's report.
