Ireland’s population is growing at a rate of nearly four people for every new home built, according to a report by an international property group.
The Savills report says that the Republic has the worst ratio of housing supply to population growth among nine high-income countries it looked at. The other countries in the study were the United States, Canada, Australia, the UK, Germany, Spain, Sweden and the Netherlands.
“While it is true that many countries across the world are facing housing shortages, it is important to recognise that the severity of Ireland’s is on a different level to others,” said John Ring, director of research at Savills. “Ireland has unique drivers – a delayed natural population boom, high migration due to strong economic growth, and structural legacy issues resulting from the Celtic Tiger crash – that explain why Ireland has the unenviable position having the worst supply-to-population growth [ratio] of the countries analysed.
“At present, we are running to stay still and a more aggressive approach to promoting new housing supply is warranted compared to our peers.”
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The comments come as new figures from the Central Statistics Office (CSO) show that Irish residential property prices are now 8.6 per cent higher than this time last year. Prices in Dublin are rising even more dramatically – by 9.3 per cent. Just 12 months ago, prices nationally were rising by just 2.1 per cent.
Prices have been rising steadily since August of last year and are now running close to 11 per cent ahead of the Celtic Tiger peak back in 2007.
Nationally, the median price of a home was €337,500 over the 12-month period to June, the CSO said, up from €335,000 in May. In Dublin, the median price was €451,000, rising to €630,000 in Dún Laoghaire, the most expensive local authority area for housing in the State. Longford, at €169,000, had the lowest median price.
Rory Hearne, an academic specialising in social policy with a particular interest in housing and a Social Democrats candidate for Dublin Northwest, said the latest CSO increase was “whopping”.
“These enormous house price increases come on top of already record high prices for homes,” he said. The increases were not sustainable and were leading to individuals and families “being locked out of home ownership” and “trapped living in their childhood bedrooms”.
Sinn Féin housing spokesman Eoin Ó Broin said the continuing high rate of house price inflation was “ further evidence that the Government’s housing plan is not working”.
“Both new and second-hand house prices continue to rise, with some regions or parts of Dublin experiencing double-digit rises,” he said. “Only a radical reset of housing policy as set out in Sinn Féin’s alternative housing plan will halt the rise in house prices and deliver genuinely affordable homes for working people.”
The Savills report says that the Republic has suffered the worst decline in affordability between 2015 and 2022 of the nine countries the researchers studied.
“Progress has undeniably been made, yet the scale of the housing crisis remains large,” Mr Ring said. “It is evident that the market requires significantly more stock across the country to meet demand for both sale and rental properties nationwide.”
Analysts at Davy Stockbrokers said demand for residential property purchases “is underpinned by many factors including strong real income growth, significant levels of pent-up demand, high rents and ECB rate cuts – three further quarter-point reductions are currently priced in for the remainder of 2024″.
On balance, Kevin Timoney and Colin Sheridan said, the brokers’ expectation that prices would rise by 7.5 per cent for the full year was likely to be well short of the mark, even with a pickup in the supply of homes typical in the second half of the year.
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.
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) said last month.
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