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Between 35,000 and 53,000 homes ‘needed annually to meet demand’

Economic and Social Research Institute report details range of outcomes for housing demand over coming years

The Government is set to unveil revised housing targets as part of Budget 2025.

Ian Curran
Tue Jul 2 2024 - 06:00

At least 35,000 new homes and as many as 53,000 may be required each year to meet housing demand, the Economic and Social Research Institute (ESRI) has said in a new report.

The Government, which has been aiming at completing 33,000 new homes annually rising to 40,000 by 2030 under its Housing for All strategy, is set to unveil revised housing targets as part of Budget 2025.

Published on Tuesday, new research from the ESRI illustrates a wide range of possible outcomes for housing demand in the Republic.

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Researchers analysed the trajectory of housing demand across 12 separate population scenarios, taking into account different assumptions around fertility, mortality and inward migration.

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Average structural housing demand across the 12 scenarios is projected to be 44,000 homes each year until 2030 and then about 40,000 each until for the next decade, said the ESRI.

In the researchers’ baseline scenario, the population is set to grow by 922,000 to just over 6.1 million by 2030. In this context, which implies population growth of more than 1 per cent annually — “high relative to other countries,” the report’s authors said — projected housing demand ranges from between 38,000 to 50,000 annually.

In other, higher migration scenarios structural demand could reach as high as 53,000, the report indicates.

Paul Egan, a co-author of the report and associate research professor at the ESRI, stressed the uncertainty around housing demand projections and said the research had to take different scenarios into account. He also said the research was based entirely on future demographic projections and does not factor in current “pent-up demand” for housing.

“Housing demand, both now and in the future, has significant implications for housing policy in terms of the number of housing units required and the areas they are needed,” said report co-author Adele Bergin, associate research professor at the ESRI. “Our research shows that on average, across a range of scenarios, around 44,000 new units a year are necessary to keep with population growth.”

The research also indicates that local authority areas in Dublin and Cork will account for about half of housing demand up to 2030. Population growth remains “unevenly spread” across the State despite strong migration inflows in recent times, said the ESRI.

“Net migration is the key driver of population change in Ireland and net migration flows have been very strong in recent years,” the report authors stated. “As in the past, while all regions experienced population growth, the growth has not been evenly dispersed throughout the country. At a national level, the population grew at an annual average growth of 1.4 per cent between 2016 and 2022; the eastern and midlands region experienced the strongest growth of 1.6 per cent.”

Minister of State for Housing Malcolm Noonan told the Dáil earlier this year that a review of housing targets “is commenced, work is well advanced and refreshed targets will be agreed by Government and published this autumn”.

It is predicted the new target will be in the range of 50,000 homes, which is within the range identified by the Housing Commission in a May report. On taking over as Fine Gael leader and Taoiseach in April, Simon Harris pledged to build 250,000 new homes between 2025 and 2030.

In a report published last month, the Department of Finance estimated the delivery of 50,000 homes would cost €20 billion in development finance annually. The majority of that — €16.9 billion — would have to come from private resources, the department said.

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times

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