Cliff Taylor: The housing market is heading for a viability squeeze

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'No wonder the Government parties are starting to get really edgy about the housing market. If there is to be noticeable progress before the next general election, then housing starts need to rise in the months ahead – and quickly', writes Cliff Taylor.

Cap on refugees rejected by Coalition but those arriving into Ireland told they could end up homelessIn terms of new housing starts and the ability of developers to finish out existing housing, rising interest rates are now coming into play. They will increase the cost of funding to start with. And higher interest rates also provide other, risk-free outlets for big international investors who have been key funders of Irish building in recent years.

Now, with the benchmark safe haven investment – US government 10-year interest rates – at 4.25 per cent , the game has changed. And the “sure bet” that Irish property prices will continue to rise, providing another source of return to investors, now looks a lot less certain.

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