The Housing Crisis Is Going To Stick Around For Another 15 Years
Image: Etienne Girardet
The Housing Crisis Is Going To Stick Around For Another 15 Years
Text: Izzy Copestake
Years of missed targets have taken their toll.
Ireland’s housing crisis is going to be around for another decade and a half according to a new report, with official projections suggesting that demand for housing won’t ease until around 2040. The Department of Finance’s long-term report, Future Forty: A Fiscal and Economic Outlook to 2065, warns that housing pressures will stay intense through the 2030s as Ireland struggles to catch up after years of undersupply.
According to the department’s report, demand for new homes is not expected to peak until the early 2030s. This is driven by population growth, changing household sizes, and years of demand. Even to meet this target, Ireland would need to be building 60,000 homes per year by 2030.
Meeting these targets would also require a major expansion of the construction workforce, with as many as 50,000 additional workers needed for residential building alone.
The report also assumes that from 2030 onwards, one in four new homes will be built for social housing. It estimates that about 26 per cent of renters will qualify for government supports such as HAP (Housing Assistance Payment) and RAS (Rental Accommodation Scheme). The resulting rise in housing expenditure is expected to bring costs for the State to a peak of roughly 2.3 per cent of national income before easing once demand stabilises around 2040.
Years and years of missed targets have already taken their toll: since 2015, average house prices have climbed 91% and private rents are up 78%. This has far outpaced general inflation of just 22% over the same period.
The report also looked at how big global shifts like climate change, digitalisation and an ageing population will shape Ireland’s economy in the decades ahead. It warns that climate impacts such as flooding and rising sea levels could knock more than 2 per cent off national income by 2065, while the country’s ageing population poses an even bigger challenge for public finances.
By then, there are expected to be fewer people working than not, putting pressure on tax revenues and spending. Without action, the State’s deficit could reach 8 per cent of national income and debt could climb to around 150 per cent. The report says continued inward migration will be key to keeping the workforce growing.
