Thousands more houses needed, Central Bank research finds
THERE is a massive unmet demand for housing due to population growth, inward migration and changes in household formation.
New research by Central Bank economists indicates that 34,000 new housing units are needed each year until to 2030.
Not nearly enough houses have been built in the past eight years, the research found.
Economists Thomas Conefrey and David Staunton base their projections on net inward migration of 30,000 people a year.
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This is in line with the trend last year and the year before that.
If net migration was to fall to 10,000 a year then they estimate that 26,500 new housing units would be needed each year up to 2030.
This country should have been building 27,000 new housing units every year between 2011 and this year.
But the economists calculated that just 10,500 housing units have been completed each year in this time period.
“Growth in population has significantly exceeded the increase in the housing stock since 2011 and the average household size has risen, reversing a previous long-running trend,” the Central Bank said in a release accompanying the research paper.
The economists said that in order to keep pace with population growth and changes in household formation, our estimates indicate that an average of around 27,000 dwellings would have been required per annum between 2011 and 2019, according to ‘Population Change and Housing Demand in Ireland’.
The economists found that in each of a number of scenarios they examined, levels of residential completions are well below estimated future demand, implying a need for further expansion in the supply of new dwellings.
The new paper comes as the latest Construction Purchasing Managers' Index (PMI) found housebuilding activity has slowed for the first time since 2013.
This week’s Ulster Bank construction survey indicated that the industry's slowdown overall moderated last month.
The headline measure of activity rose to 48.2 from 46.2, moving towards the 50 level that marks the point of growth versus contraction.
But home construction fell below 50 for the first time since June 2013, slumping to 47.7 from 51.3 in October.
It comes as house price rises have moderated. Prices have risen so much that many buyers are precluded from borrowing enough to buy them under Central Bank lending restrictions.