It said the construction of 90,000 houses by 2021 should satisfy demand. Two thirds of this needs to be in Dublin, where new building is required quickly.
The ESRI paper said it did not agree with previous predictions by the Housing Agency, that 64,000 were required by 2018, as there were too many empty properties in the system.
“The analysis showed that while demographic change implies that, between 2011 and 2021, 180,000 additional housing units would be required, the number of vacant dwellings implies that for many counties no additional housing units will be needed,” it said.
Footnotes to the ESRI report said its figures undercut the Housing Agency’s because its report took into account a significant oversupply of houses when the census was taken in 2011.
It said that while there was a demand for 180,000 extra units, but half of this could be accommodated by freeing up empty properties.
The ESRI paper said there would be a shortage of stock in counties Dublin, Kildare, Meath, Cork, Galway, Louth, and Westmeath. However, Cork, Galway, and Westmeath could address the issue between now and 2021 by filling up unused properties.
“The analysis here shows that housing supply issues are almost exclusively concentrated in the Greater Dublin region,” it said.
The paper assumes that all vacant stock can be matched with buyers’ demands for location and type of property. The more conservative estimate from the ESRI has tempered expectation of similar property price increases to those witnessed in the Dublin region since the end of 2012.
It conflicts with other recent analysis such as the county development plan for Cork. The plan has estimated the county will need an extra 58,000 housing units to satisfy demand up to 2022. This is based on the expectation that the population in the county will increase by 71,000.
The ESRI said planners needed to factor in the substantial amount of empty properties, although it accepted that even in a properly functioning market many units would still be vacant for various reasons.
It for this reason that local studies of the vacancy rate needed to be undertaken to assess likely demand.
“Excluding holiday homes, some 230,000 housing units were vacant in 2011, while the demographic projections indicate over the 10-year period to 2021 some 180,000 households will need to be added,” said the ESRI.
“This would imply that no new properties would need to be built in that time period if all vacant properties were in locations that matched the projected population growth. Of course, this is not the case which is why sub-national analysis is required.”