Ireland's housing delivery the fastest in Europe, developer's report claims

The Goodbody for housing developer Glenveagh said the country's housing problem 'is the cumulative consequence of more than a decade of insufficient supply'

The report noted that despite the country’s progress in housing delivery, it remains one of Europe’s most supply constrained housing markets.

Per capita, Ireland is currently building homes at the fastest pace across Europe with challenges in the market stemming from over a decade of insufficient supply as population growth surged, a new report has found.

According to the report, produced by Goodbody for housing developer Glenveagh, Ireland is producing 7.2 homes per 1,000 people which is more than double the average across Europe of three per 1,000 people — Portugal is the nearest at 5.8 per 1,000.

The rate of development is also three times that of the UK.

“Euroconstruct projections suggest that Ireland will maintain this position in both 2027 and 2028, with output rising to 7.7 and 8.3 units per 1000 of the population respectively in these years,” the report said.

However, the report said the challenge of the housing sector is not “not principally one of a failure to build today” but rather “it is the cumulative consequence of more than a decade of insufficient supply, both private and public, occurring at the same time as exceptionally strong demographic growth”.

The report said the policy challenge is therefore “sustaining elevated levels of housing delivery over a prolonged period rather than simply achieving a temporary increase in output”.

The report noted that despite the country’s progress in housing delivery, it remains one of Europe’s most supply constrained housing markets. Ireland has approximately 585 dwellings per 1,000 adults aged over 25, compared with a European median of 691.

“Achieving the European median would require almost 400,000 additional dwellings. These figures indicate that Ireland’s housing challenge reflects the cumulative impact of prolonged underbuilding over a sustained period,” the report said.

On the issue of housing affordability, the report said the country’s new housing market has not experienced unusually strong price growth in a European context.

New home prices have increased by an average of 6% per annum over the past decade, close to the EU average of 5.6%.

“Ireland sits broadly in the middle of the European ranking for new home price inflation.” Ireland also has one of the highest average household sizes in Europe at approximately 2.7 persons per household compared to European average of 2.2.

On top of this, Ireland’s population has increased by approximately 16% over the last decade to 5.45 million compared with growth of around 2% across Europe overall.

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“Unlike many European countries facing weak demographics, Ireland continues to experience strong population growth driven by both net inward migration and natural increase. This creates a level of underlying housing demand that is largely unmatched elsewhere in Europe.” 

Ireland’s population is also more spread out with approximately 45% living in rural areas in comparison to the European average of 25%.

“Ireland also has the lowest share of its population living in apartments among the countries examined, with only around 10% residing in apartment accommodation compared with almost 50% across Europe as a whole,” it said.

“Instead, the housing stock is dominated by semi-detached and detached homes. This reflects Ireland’s historical settlement patterns, planning traditions and consumer preferences.” 

The report said these preferences have policy implications with lower-density development requiring greater infrastructure investment, higher servicing costs and more extensive transport networks than apartment-led development models.