No matter what some people might argue, Ireland needs immigrants. This economy and society cannot survive without them. From healthcare to high-tech, construction to hospitality, the country would grind to a halt without immigrants and Ireland, on many metrics, benefits enormously from our hardworking and talented new citizens.
But there is a problem, and it’s not their fault. From our planning, transport, education, welfare and health system to our construction industry, Ireland, as presently administered, is not able to deal with a rapidly rising population.
This week we learned that homebuilding activity in Ireland fell for the second month in a row in June – the fastest decline in almost 18 months. At a time when we need more houses we are actually building too few. As a result, the punter pays.
House prices rose 7 per cent in the past three months. The average Dublin home is now just shy of half a million euro.
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While there are serious problems with housing supply, there is also too much demand, and this extra demand is increased by pressure from immigration. Stark as it may seem, Ireland will not solve its housing shortage and the attendant problems around transport, an over-stretched health service and crowded classrooms without taking into account how many people are coming into the country.
Economists talk about importing labour as if labour was some dry input for a model, but in reality labour is people, their children and a family’s requirements for life – homes, hospitals, water supply, railways and schools.
Without a plan, we get chaos.
Immigration can drive a class wedge into an already class-sensitive society. For some of the working class, immigrants are perceived as a threat; for many richer people, immigrants are a treat. Immigration doesn’t affect everyone the same way.
Typically immigrants compete with the working class for jobs, public housing and public services. Middle-class or richer people often see immigration as complementary in the sense that immigrants make richer people’s lives easier and cheaper – be it better barbers and private medical consultants, restaurants or faster parcel delivery services. These may sound trite, but it all adds up.
We see this class divide borne out in anti-immigration rallies. From a macroeconomic perspective, more people competing for jobs that are paid less will reduce wages at the lower end, while more people looking for cheaper homes in less expensive areas will drive up rents and house prices, reducing already fragile incomes.
But it is not as simple as one group versus another; nor is it the case that if one group wins the other loses. Immigration figures include returning Irish citizens. Ireland has been open to new arrivals for a long time. From 1995 to 2015, the total numbers of immigrants into Ireland was 1,178,900, including returning Irish people. That’s a lot of families, without whom the economy would not have expanded so rapidly; but that growth was over 20 years. Since then, immigration has risen more dramatically. For example, from April 2022 to April 2023, Ireland took in approximately 141,600 immigrants, which is a 16-year high and a 31 per cent increase from the previous year. This period also includes a significant number of asylum seekers and Ukrainians fleeing war.
To put these figures into perspective, if we continued at a rate of 141,600 immigrants a year for the next 20 years, we would end up with a population of 7,922,263. That is 900,000 beyond the Central Statistics Office’s most ambitious population forecast – and that’s before taking into account the natural increase in population.
So how many people is too many?
If this country were well run, this question might be reasonably easy to answer. We could make some connection between State spending and State delivery of basic objectives, such as railways, homes and hospitals, and arrive at a figure. However, the years when immigration surged coincided with a period where the ability of the Government to plan, build and finish public projects appears to have collapsed.
The disintegration of core State competence is best evidenced by the fact that Government spending has ballooned by 47 per cent, from €71 billion to €105 billion, over the past five years and we have no significantly improved infrastructure to show for it. We could say that Ireland has a management problem as well as a demographic dilemma.
Adult countries make adult decisions about what is feasible, practicable and workable based on growth rates, construction capacity and the overall ability of the economy to deliver. Ireland is not opening the conversation, let alone making decisions. Ultimately, the decision about how many people can immigrate each year should be driven by data, not by emotion.
That decision should originate from a framework that starts with housing because housing is where individual decisions affect the collective. Growing numbers push up demand which pushes up prices. When one individual or family bids for a house in a market as tight as Ireland’s, they set the new base price, not just for themselves, but for everyone. The more bids, the higher the price.
Houses prices don’t affect us evenly. If you own a home, then you feel richer as prices rise. Rising prices have a positive effect on you. If you don’t own a home, it has the opposite effect: your standard of living falls every time house prices rise because it takes more out of your income to pay for a roof over your head. This dynamic exacerbates the potential class divide.
But that’s not all, there is a generational impact too. Who owns property, the young or the old? The old of course. The young pay the price for the dysfunctional system in which no part of the State seems to be working effectively with the others: the Department of Justice, the Department of Housing, the planners and the Department of Transport.
All the while, the IDA is tasked with getting more and more investment into the country, demanding more and more skilled people, many of whom must be imported, who put yet more pressure on the system. Meanwhile younger Irish people leave.
In the real world, beyond Government Buildings, only 30,330 homes were completed in 2024, well below the trajectory needed to meet the Government’s pledge of 300,000 new homes by 2030. In the first quarter of 2025, there were just 5,938 new houses built, a 2 per cent increase year-on-year, but still way below the annual target of 41,000 (far below the figure of 60,000 that I believe is a more accurate reflection of our need based on demographics).
[ Central Bank ‘surprised’ by lack of progress in building homesOpens in new window ]
In contrast, in the 12 months to April 2024, 149,200 immigrants came into the country, outnumbering 69,900 who left. This marked a 17-year high in immigration and the third successive year in which more than 100,000 immigrants entered the State. Of the people who came to the country, 30,000 (20 per cent) were returning Irish, 27,000 (18 per cent) were from the EU, 5,400 (4 per cent) were British and 58 per cent of all immigrants – 86,600 – came from the rest of the world. This final group is the only group over which the State has legal border control and this is where that adult conversation must begin.
How many people is practical? To put things into perspective, every 10,000 in net migration per annum roughly equates to increased demand for 4,000 dwellings (given their smaller average household size of 2.5 people). Using this logic, Ireland will need to build more than 36,000 new homes each year just to stand still – that’s more new homes than we are likely to build for everyone this year. This is a recipe for higher and higher houses prices and rents, angering more and more people.
Without a serious data-based rather than emotional conversation, the social and political pot will continue to simmer.
