Drop in young adults will hit housing needs

A large decline in the number of young Irish adults is likely to have a huge impact on future housing needs, according to a leading estate agency.

Savills claims recent demographic shifts mean the demand for new apartment developments will be limited in many locations around Ireland.

It believes a 23% decline in the number of 20-somethings — rising to a 26% decline in Dublin — will see a reduced need for apartments and smaller living units.

Although net emigration has run at more than 30,000 per annum in recent years, Savills said the impact of high fertility and longer life expectancy meant there was still a growing demand for more housing.

In an analysis of recent census figures which has seen the population grow by 360,000 since 2006, Savills has calculated that the increase will result in a demand for 132,000 extra housing units.

John McCartney, a Savills economist and director of research, claims such a demand is a factor in the recent rebound in house prices in Dublin.

However, he said careful attention needs to be paid to the type of dwellings which are being built.

He pointed out that the dramatic reduction in number of young adults, who represent the natural market for apartments, was likely to limit demand for such housing outside city centre locations and those close to public transport links.

He said new residential developments should be weighted towards family homes as there had been a 9% increase in children aged five or under since 2006 — a figure which has risen by about 14% in Dublin.

“Young children need indoor space for their apartment and a private garden area is also desirable, as is surface car parking. Clearly these requirements are not best met by apartments.”

He said the number of young adults should continue to fall until 2025 because of falling birth rates in the period 1980-1994.

Demographic shift

The changing face of Ireland

* Population has grown by 360,200 since 2006, giving rise to the need for 132,000 additional housing units

* Children under 5 up 9.1% (nationally) and 14.6% (Dublin) since 2009

* 20-somethings dramatically down since 2009: -23.3% (nationally), -26.3% (Dublin)

* Demographic shift means demand for new apartment developments will be limited in many locations

* New residential development should be weighted towards family homes