Jim Power: A strong economy and full employment are not enough to entice voters

This is despite the fact that the labour market has staged a remarkable recovery since 2012.

The latest unemployment data for January, published this week, show that the number of people unemployed fell by 4,000 in the year to January to reach 120,200.

This represents a decline of 236,200 on the high point of January 2012.

The unemployment rate is down at 4.8% of the labour force and we have a record number of people at work in the economy.

It seems clear that, although young people have much better employment opportunities today than for many years, the fact that many cannot aspire to home ownership - and if they can, it is in a remote location where they will be forced to endure a commuter hell - is causing serious disillusionment with those in power.

Furthermore, the option of renting, which those who do not have the luxury, or horror, of living at home with their parents are being forced into, is also unacceptably expensive.

Despite the strong economy, many young people in particular are struggling to see how they are benefiting from it, and are now in a mood to take it out on the incumbent government.

Whatever combination forms the next government, it is pretty clear that housing will have to be top of the agenda.

To put the current housing market into context, it is worth considering some recent data on housing supply and future projections and promises from those aspiring to government.

In the five-year period between 2011 and 2015 just 29,217 new houses were delivered in total, which is an annual average of 5,843. In 2013 alone, just 4,575 houses were delivered.

In the four-year period 2016 to 2019, a higher level of 63,755 houses were built, which is an annual average of 15,939.

Given Ireland’s demographics, it is estimated that we need to be building at least 35,000 houses per year and given that for a number of years we effectively almost stopped building houses, there should be no surprise that we are in the housing mess that we are in.

It is naïve to think that anybody could just turn back on the tap and deliver the requisite supply overnight.

The legacy of the crash in the house building sector is still very real and will take some years to finally work through.

Unfortunately for those in power, the electorate does not have that sort of patience.

In election manifestos at the moment, very significant promises are being made on housing delivery over the possible five-year lifetime of the next government.

Fianna Fáil is promising at least 200,000 new homes; Fine Gael is promising “in the order of” 35,000-40,000 new homes every year; and Sinn Féin is pledging to deliver an average of 20,000 public homes each year to meet social and affordable needs.

Given where we are coming from, it will be very difficult to deliver that sort of housing supply.

On the developer side, factors such as the cost of land, access to funding for smaller developers in particular, and the interplay between the Central Bank’s sensible macro-prudential lending rules and the cost of delivery are all combining to restrict supply.

The other big constraint will be the labour force required to deliver what is needed.

In an economy facing full employment, labour-driven capacity constraints are becoming a very real issue.

Builders are also competing with massive development projects such as the National Children’s Hospital.

One thing is certain, there will be massive pressure on the incoming government to sort out housing and other issues that are so important for quality of life such as health services and public transport.

Economic growth and full employment are clearly not enough to satisfy a demanding electorate that is now being promised all manner of treats.