The Government's annual house-building targets are far too low to cope with surging population growth, experts have warned, as new figures show rising house prices are putting home ownership beyond the reach of most people.
Lack of capital and rising costs are damaging the delivery of housing, especially apartment projects which are already “borderline viable”, a summit of the Irish Homebuilders Association (IHBA) was told.
Just under 29,000 new homes were built last year, with the Government’s Housing For All target for 2023 set for a further 29,000.
But Marian Finnegan, managing director with Sherry Fitzgerald, said the population increased by over 360,000 people to 5.1m since the last census in 2016, while there was an increase of just 120,000 in housing stock in that time, with the population expected to grow to more 5.8m by 2036.
She said the housing crisis should be treated as an “emergency”, and Ireland should be averaging 52,600 completions a year to house all of these people.
If the housing crisis is not addressed, it will impact the growth of the Irish economy because people will not move to Ireland to live and work if they have nowhere to live, she said.
Sean O’Neill, managing director of Park Developments and chairman of the IHBA, said the industry has seen a 20% increase in costs in the last two years, with rising interest rates set to impact available funding for construction projects, especially apartment projects, which are “already borderline, if at all viable”.
New housing affordability figures from Gamma show house prices in Dublin, Cork, Galway, Kildare, and Wicklow, are beyond reach for many, with just a quarter of homes sold in Ireland within budget for individual buyers.
Its analysis found that the median price of all private residential sales across the country between 2019 and 2021 was €255,500 — more than the median household could afford.
“The shortfall in Cork City between what the median household could afford under mortgage borrowing rules — €209,000 consisting of a mortgage of €167,000 and a deposit of €42,000 — and the actual median property price (€245,000) was €36,000,” it said.
The shortfall in Dublin City was €115,000, it was €216,500 in Dun Laoghaire-Rathdown, €41,500 in Galway City, €48,000 in South Dublin, and €79,500 in Wicklow.
In Dun Laoghaire-Rathdown, 87% of homes sold for more than what the local median household there could afford.
In Dublin, 82% of homes sold for more than what the local median household could afford, with Galway City at 66%, and Cork City at 64%.