Around 90 new homes would need to be built every day until the end of the decade to meet demand in Ireland a new study has found.
According to research put together by The Central Bank of Ireland around 34,000 new dwellings would be required each year until 2030 to help solve the housing crisis.
And this is assuming household formation patterns do not change and net inward migration remains close to current levels.
The study states that changes in population and household formation are the biggest factors which determine housing demand but researchers have said the future of the housing market remains uncertain.
In the economic Letter titled ‘Population Change and Housing Demand in Ireland’ published on Tuesday, researchers estimated scenarios for long-run housing demand in Ireland using the most up-to-date population projections from the CSO.
And while a staggering amount of new homes would need to be built everyday for the next 10 years to alleviate the housing crisis, the study also found that housing demand in Ireland hasn’t been met for over a decade.
The report points to a significant level of unmet housing needs over the period of 2011 to 2019. The Central Bank estimates that around 27,000 dwellings would have been required per year to keep pace with the growth in the population and changes in household formation.
But the actual number of housing projects which were completed over this period was significantly lower amounting to around 10,500 each year on average.
Further scrutiny of the study also shows that growth in population has exceeded the increase in the housing stock since 2006 and especially since 2011.
In the decade from 2000-2010, the annual rate of population growth was just over 1.8%. This rate slowed greatly between 2007 and 2012 going from almost 3.5% to below 0.5%.
But since 2012, population growth has accelerated again to an estimated rate of 1.3% in 2018, similar to the rate of growth in the early 2000s.
Between 2011 and 2016, the increase in the housing stock was just 8,800 (0.4%). This is in stark contrast with the growth in the population of almost 174,000 (just under 4%).
While the future of the housing market is not certain, researchers say that if household formation rates in Ireland were to converge gradually towards current UK rates as they previously had been until three years ago, this would create significantly more demand for housing in the future.
Household size in Ireland had been on a consistent downward path for over fifty years but this trend stalled in 2016.
Data from Eurostat shows that Ireland has the third highest number of persons per household in the EU along with Cyprus, Poland and Romania. And we are an outlier in this regard, since countries with similar income per capita generally have a relatively lower household size.
In each scenario examined, researchers said recent observed levels of residential completions are well below estimated future demand, implying an urgent need for expansion in the supply of new homes in Ireland.
