IHBA: Key indicators remain positive in housing market

The Irish Home Builders’ Association (IHBA) has today pointed to favourable economic and demographic factors as the key drivers of strong demand for housing in the medium and long-term.

The statement comes following the recent RTÉ programme ‘Future Shock: Property Crash’ which predicted a dismal future for the Irish property market.

“The growth in the housing market is tied to key trends, economic growth and demographic movement,” said IHBA director Hubert Fitzpatrick.

“In terms of the underlying economy supporting demand for housing, key indicators remain positive.

“The economy is predicted to continue growing over the medium term at around 5% per annum, approximately 1.5% above the EU average. This in turn will improve private sector corporate investment.”

“The second underlying issue is demographic change. The population of Ireland has grown far in excess of the forecasts made in the National Spatial Strategy and the Regional Planning Guidelines. They forecast a population of 4.4 million in 2020. The current population is already 4.2 million and could easily reach 5.2 million in 2020.

“More importantly for housing, much of this increase comes from migrant workers, attracted by the growing economy and increased employment opportunities.

“Medium-term forecasts show that with continued economic growth, changes in demographics and continued net migration, the annual requirement for new houses will remain high – at around 2004 levels.

“With housing rents rising at their fastest pace for the past six to seven years, the key requirement is to ensure that housing supply can be kept at a high level in meeting this demand.

“Existing housing stock levels in Ireland amounts to 411 units per 1,000 population. An additional 260,000 houses approximately are now required in Ireland so as to bring our housing stock levels up to the average European stock level of 474 units per 1,000 population.

“These key underlying trends are important for the housing sector in ensuring that housing supply can meet demand.”