Close to 50,000 housing units would have to be built here every year for the coming decades in order to keep up with demand.
That’s according to a report on the housing stock carried out for the property industry group, Irish Institutional Property (IIP).
It contains an analysis by Trinity College Professor, Ronan Lyons, which said the baseline scenario of 50,000 homes a year would be required until ‘at least mid-century’ if the housing stock was to reflect the country’s demographics.
Currently, official estimates put the housing demand annually at between 30,000 and 35,000 units.
Just under 21,000 units were completed last year.
The report concludes that reaching the 50,000 annual target would require capital of close to €16 billion annually, ‘almost all of which would come from overseas.’
There’s been an intense focus of late on the role played by international institutional investors in the property market here, particularly when it comes to buying up residential units for rental, displacing potential first-time buyers and those seeking to trade up in the process.
The bulk of the housing need, the analysis says, will be for one and two-person households in urban areas.
Housing units for smaller households are more expensive to build per person ‘highlighting the importance of
collective investment vehicles to address this funding need.’
“This combined viability-affordability challenge means the break-even cost of a two-bedroom apartment in Ireland is close to €450,000, something that only the top sixth of the income distribution could sustainably afford currently,” Ronan Lyons concludes.
The report says the need for housing and capital would be split across the main tenure categories, those being owner-occupied, market rental and social housing.