The familiar response of politicians to the problem of rapidly rising house prices is to blame a shortage of supply.
In response, all policy levers, including reducing standards, are being pulled to encourage in particular the supply of tens of thousands of new apartments.
On RTÉ’s Morning Ireland this week, Taoiseach Micheál Martin said that “we need more private sector, and particularly apartment, building”.
The issue is that fewer than one in 10 of all new apartments ever come to the market for sale, and less than one in 20 in places like Dublin city. So just what effect has policy had on housing output and where are we headed?
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In 2017, the median new house price was €310,000, but by 2024, in spite of significantly increased supply, the median price of a new home had increased to €425,000. Over the same period, some 15,976 more new dwellings were completed than 2017, yet the number of sales of new homes to households only increased by 3,299.
We’re building much more than we’re selling.
Eight years ago, nearly half of all new homes appeared in an estate agent’s window for households to buy, but due to increased state and investment purchases, by 2023 this had reduced to 28 per cent rising subsequently to 33 per cent, because apartment delivery reduced the following year.
In the four Dublin local authorities last year, nearly 11,000 new dwellings were completed. According to Central Statistics Office (CSO) data, of this, just eight per cent of all the apartments and 56 per cent of new “scheme” or estate houses were sold to households. In Dublin city, of the 3,350 new homes built in 2024, 111 apartments were sold to household buyers and just 44 new scheme houses. That’s it.
[ Ireland is seventh most expensive country in euro area for new mortgagesOpens in new window ]
It’s not just in Dublin. In Cork City in 2024, nine new apartments were sold to households out of 313 built. Out of 856 new scheme houses, 44 were bought by households.
And what are people paying for all these new homes?
Across Co Dublin, first time buyers paid a median purchase price of €475,000 for their new home, and those moving house paid €600,000. In Dublin city, the median price of a new home bought by a household in 2024 was a whopping €850,000 – comprising €875,000 for an apartment and €630,000 for a house. In 2017, the median price for a new apartment in Dublin city was €420,000 and €369,000 for a house. In Cork city, the median price in 2024 for a new home was €500,000.
That’s are a lot of numbers to digest, but what does it all add up to?
If current trends continue, and there’s no reason to think they won’t, then socially Dublin city in particular will end up a place of extremes: housing will be for the better-off or the poorest families, with a smattering of the “struggling middle” perhaps having to share accommodation to spread the costs. Everybody else has fled beyond suburbia. Or Australia (housing is a significant push factor in emigration).
This is not how you want a city to evolve. Think €6 coffees, €10 craft beers and €60 steaks alongside food banks and rising social inequality. Think city centre primary schools considering closing due to a lack of children (which is happening already).
For lots of reasons, cities need a mixture of incomes and family sizes.
Conscious that home ownership equals wealth in Ireland, and either not wanting to live in the inadequate apartments that are being built or not being able to compete with state-funded bodies or investors to buy them, many households are looking for somewhere to buy. Therefore they are moving further away from their families and jobs.
This is evidenced in rising family home prices in places like the midlands and beyond. The Border region saw the highest rise in house prices over the last year.
Spatially, more households being forced to live further away and to commute by car is a very poor planning policy outcome and undermines climate, sustainable settlement and transportation strategies.
Economically, according to the Housing Agency, Dublin is already “severely unaffordable”, and it is evident that current output is doing little to make housing more affordable.
The Government thinks the answer is tens of thousands of new apartments. Apartments can be great when they are affordable and available. The data show that they are increasingly neither.
Recent changes in apartment standards further reduce the potential of apartment living for families and their general attractiveness. As UCD’s Orla Hegarty has demonstrated, these new standards will result in buildings housing fewer people (while simultaneously generating significantly more rental income). This the opposite of what the concept of apartment living is supposed to deliver: density and better use of resources, especially land.
[ Irish house price inflation eases slightly to 7.5% as average cost hits €422,400Opens in new window ]
Where is Fine Gael’s “fair and caring society” and Fianna Fáil’s ambition to “advance the social and economic welfare of all” in this?
Homelessness has almost doubled since 2017 and home ownership is falling at the same time as housing delivery has more than doubled. Policy is increasingly creating an unequal society that serves the needs of a small minority of relatively privileged households and corporations.
The Government plans for about 55,000 new homes annually on average between now and 2034, but if the housing is unavailable and high priced, it won’t do much to ease the crisis.
Neither does there seem to be any appreciation or consideration of the likely consequences of what will happen economically, spatially and socially if we don’t make more housing available to more people to buy at more affordable prices in more locations. Policy has seemingly its face set against the housing middle Ireland wants and needs. It’s not the private sector that needs to up its game, but the State.
Dr Lorcan Sirr is a senior lecturer at Technological University Dublin
