Ireland will need up to 53,000 new homes each year as population grows

According to the ESRI, Ireland's population is expected to increase by 922,000 people between 2022 and 2040, a 'significant overall population growth of 1% on an annual average basis'. Picture: Steve Parsons/PA

Ireland will need up to 53,000 new homes a year to keep up with population growth, even without factoring in all the “pent-up demand” from years of undersupply, a new study has found.

The Economic and Social Research Institute (ESRI) report, funded by the Department of Housing, projects 12 scenarios of how demand for housing could change in Ireland up to 2030 based on various population growth scenarios, including varying levels of immigration.

It found that, even on the lowest estimate of 35,000 homes a year, this was still more than the number of homes being built annually in Ireland in recent years.

“Housing demand, both now and in the future, has significant implications for housing policy in terms of the number of housing units required and the areas they are needed,” said ESRI associate research professor Adele Bergin.

Our research shows that on average, across a range of scenarios, around 44,000 new units a year are necessary to keep with population growth. 

According to the ESRI, the population is expected to increase by 922,000 people between 2022 and 2040, a “significant overall population growth of 1% on an annual average basis”.

Ireland’s population in this scenario would exceed 6.1m. However, it pointed out that the difference between the high and low scenarios for international migration is around 400,000 people. The ESRI added that these projections are based on a range of assumptions, and there is uncertainty in any projection exercise.

It said that nearly half of the demand for new housing up to 2030 will come from Dublin and Cork.

However, this research was based on projected population growth in the coming years. It does not include existing demand during this housing crisis, meaning the actual number of homes required could be far higher. The ESRI said: 

Total housing demand includes this structural element as well as what is referred to as ‘pent-up’ demand. 

“While structural demand can be considered the number of additional housing units needed in a given year to meet new demand, pent-up demand includes the gap between supply and demand on a recurrent historical basis. 

"There was a significant reduction in the number of dwellings being built in the years following the global financial crisis. This meant a backlog of sorts built up which exacerbated the gap between the supply and demand of housing.”

The research may have implications for the Government’s housing policy.

Taoiseach Simon Harris has previously vowed to deliver 250,000 new homes over the next five years. He has also said he expects this figure to be in the Government’s revised housing targets when they are revealed.