Ireland may need up to 62,000 new homes a year, Housing Commission indicates

Unpublished research by the Housing Commission says Ireland may need up to 62,000 homes built per year until 2050 to meet demand – almost double the annual target in the Government’s master plan for this decade.

The research, which was shared with Minister for Housing Darragh O’Brien in November last year, indicates that Ireland requires between 42,000 and 62,000 new homes every year – under Mr O’Brien’s Housing for All strategy, 33,000 is the average annual target in the period to 2030.

The Housing Commission was established under the programme for Government to examine housing policy issues.

The research is based on “plausible scenarios” for overall population size, average household size and the rate at which the current housing stock will become obsolete.

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It examines scenarios where, by mid-century, the population grows to between 6.25 million and 7 million people, and household size stays where it currently is, or shrinks to a level closer to where peer countries are – between 2.4 and two people per household.

It models the typical home in existence last year lasting for between 150 and 333 years on average. “Based on the latest available information, the Commission believes the baseline range of housing requirement to 2050 to be between 42,000 and 62,000 homes per year,” it says.

With population growth consistently at the upper end of official projections due to higher migration, it finds that since 2017, migration has been more than 10 per cent above the high-migration scenario – even excluding recent arrivals from Ukraine.

The inflow of people has both an immediate effect and later impacts, boosting the number of births. Population alone, the Minister was told, is likely to drive the baseline requirement for houses to between 35,000 and 40,000 per year.

Obsolescence in the housing stock built before 2022 suggests a further requirement of 7,000-17,000 homes per year.

‘Plausible’ scenario

The research presentation argues that existing assessments of housing needs have a flawed assumption that the size of households will remain “largely constant” to 2040. This in turn would mean Ireland would solidify its standing as an outlier in Europe, where peer countries have smaller households.

It argues, however, that “household size has been falling steadily in Ireland – in line, but later than, European peers”, although this convergence stopped in the 2010s when the rate of building new homes collapsed.

“While baseline targets are based on elevated household size, it is more advisable for policy to facilitate convergence to peers,” the research argues.

The “most plausible” scenario outlined by the paper, with a 2050 population of 6.75 million, 200-year lifespans for existing homes and falling household sizes comes in at a need for 42,000-62,000 homes per year. Lower assumptions suggest a need of 21,000 while the highest modelled figure is for 72,000 per year.

Political leaders have been signalling for some time that housing targets, which are currently being reassessed, may have to be increased. Earlier this month, Taoiseach Leo Varadkar said “it makes sense” to revise targets upwards in the face of demographic pressures and arrivals from Ukraine – many of whom are now expected to settle in Ireland permanently.

Mr Varadkar today told the Dáil that the Government missed its social housing targets last year – but exceeded its overall target for new homes. He said there were 6,500 new social homes provided, responding to Social Democrats co-leader Catherine Murphy who said the Government missed an initial target of 9,000 that itself was later reduced to 8,000. He said he wants the target of 29,000 new home completions this year to be exceeded.

Later, a spokesman for the Taoiseach said that the final figure for social housing was still being compiled. “While it is anticipated we will miss the original target for 2022, the final newbuild social housing figure will be much higher than the estimate of 6,500,” he said, adding it was likely to be the highest out-turn since the 1970s.