Notions that a mass exodus of foreign nationals would cause a collapse in both housing supply and demand are misplaced, writes John McCartney

Migrant workers are now such an integral part of life in Ireland it is hard to believe that only three years have passed since the EU welcomed 10 new member states into the fold. Since then, 121,741 people from the accession states have chosen to make Ireland their home.

Assimilation of these new EU citizens into the Irish labour market has not been without controversy. Issues such as exploitation of foreign national workers and displacement of local labour have made the headlines at various times. As house price growth has slowed, however, the role of foreign nationals in the Irish property market has also begun to attract attention.

An increasingly popular argument is that foreign national workers now occupy a critical position in the housing market.

On one hand, it is said that foreign labour has facilitated our record levels of house building in recent years. On the other, it is claimed that foreign nationals have swelled the demand for housing. This has led some commentators to conclude that a perverse process is at work - foreign construction workers are building houses for sale to Irish investors who rent them back to foreign builders.

As an addendum to this thesis, there is the ominous suggestion that these workers could up sticks and head home at any moment, leaving a glut of properties on the market.

While these arguments may have some intuitive appeal, they get little support from the figures. To begin with, consider supply.

There is no doubt that foreign labour has made a welcome contribution to Ireland's construction capacity at a time when our housing, transport and social infrastructure have being playing catch-up. However, latest Central Statistics Office (CSO) figures put this in perspective - workers from the accession states account for no more than 8.4 per cent of all builders in Ireland.

On the demand side, the numbers are even less convincing. Based on the average census figure of 2.9 persons in each household, migrants from those 10 EU states currently generate demand for about 42,000 dwelling units - less than 2.4 per cent of the State's total housing stock.

At these levels, it is difficult to argue that even a sudden flight of migrant labour from our shores would precipitate a collapse in the housing market.

Simply, there is nothing to suggest any likelihood of a sudden net loss in the number of migrant workers living in Ireland.

To begin with, there is inertia. No matter what happens, some migrant workers will stay in Ireland. Friendships will be built, families will be formed and Ireland will become home.

Indeed, this process explains why many of our own emigrants never returned to Ireland. But there are also strong economic arguments against the likelihood of our foreign nationals suddenly leaving - although to understand these, we must distinguish between the long and short run.

In the long run, one would expect - indeed one would hope - that EU enlargement will lead to higher living standards in the new member states. The process through which this should happen is simple: skilled workers from the EU10 would be attracted to Ireland by higher wages.

This would cause skills shortages in their original countries which would drive up local pay levels and eventually entice some of these workers back home.

However, this process is likely to take many years. To see this, consider the case of Poland. According to the most recent census, there are currently 63,000 Poles in Ireland, where our average wage is €32,432. With average earnings in Poland just €6,230 per annum, an enormous pay gap has to be bridged before most Polish emigrants could contemplate returning home.

With wages even lower in many other new member states, the short-term reality is that most of our migrants will remain in Ireland for the foreseeable future.

Furthermore, political factors would seem to dispel any suggestion that a net loss in our migrant numbers is likely, even in the longer run. While wages and living standards in the EU10 may eventually rise to levels that might attract returning immigrants from Ireland, EU enlargement is unlikely to stop at 25 countries.

Already Turkey, Macedonia and Croatia - with a combined population of 80 million - have applied for EU membership. This means that, if and when some of the current wave of migrant workers ever drift home, there will be a cohort of workers from newer member states.

There is no doubt that the Irish property market has slowed down in recent months. Interest rate increases, the stamp duty debate and affordability issues have all taken their toll. However, any assertion that this orderly slowdown could be tipped over into a collapse by a flight of migrant workers from Ireland seems well wide of the mark.

• Dr John McCartney is an economist and head of research at estate agents Lisney