'More aggressive' approach needed as population growth outpacing delivery of new homes

Savill’s director of research John Ring said: 'At present, we are running to stay still and a more aggressive approach to promoting new housing supply is warranted compared to our peers.'

Ireland’s population growth is outpacing the delivery of new homes at a rate of almost four to one, new analysis suggests.

The research from Savills Ireland compared Ireland with several other advanced western economies and found this country fares the worst in terms of population growth to housing delivery.

Ireland’s ratio of 3.8 people added to the population for every unit of housing delivered was 80% worse than that of the UK (2.1 ratio) and double that of Australia (1.9). It was also significantly worse than the US (1.5) and Germany (0.9), which Savills said highlighted that Ireland “really does stand out alone” in the severity of its housing shortages.

“Ireland has unique drivers — a delayed natural population boom, high migration due to strong economic growth, and structural legacy issues resulting from the Celtic Tiger crash — that explains why Ireland has the unenviable position having the worst supply to population growth of the countries analysed,” Savill’s director of research John Ring said.

“At present, we are running to stay still and a more aggressive approach to promoting new housing supply is warranted compared to our peers.”

Mr Ring added that progress has been made in terms of supply but the scale of the housing crisis “remains large”, and that new Government targets around the delivery of housing over the coming months is to be welcomed.

“New targets should be reasonable but also ambitious and challenging, which recognise the seriousness of Ireland’s housing crisis as outlined in this analysis,” he said.

House prices

The research from Savills came as the latest Property Price Index from the Central Statistics Office (CSO) showed that the cost of purchasing a home in Ireland rose 8.6% in the 12 months to June 2024.

The median price of a home purchased in Ireland over the last year was €337,500, the CSO said. The median is the middle figure in a row of numbers sorted from top to bottom, as opposed to the average.

In that time, house prices have been rising faster in Dublin (up 9.3%) than the rest of the country (up 8.2%). The latest figures mean that Irish house prices are now 10.8% above their Celtic Tiger peak of April 2007.

For the first time in two years, the cost of second-hand homes is rising at a greater rate (up 8.6%) than new builds (7.4%), reflecting the strong demand and limited supply.

In Cork County, homes were selling for a median price of €340,000. This was significantly cheaper than the median price of €451,000 being paid by home buyers in Dublin.

In Cork City, homes are selling for a median price of €300,000, according to the CSO. The most expensive area to buy in Cork remains the P17 Kinsale postcode, with a median price of €450,000.

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Trevor Grant, the chair of Irish Mortgage Advisors, said: “This is the tenth consecutive month that annual house prices have increased and means that many prospective first-time buyers will continue to see their chances of buying a home slip away from them.

“Current Government house building targets are well below that though Taoiseach Simon Harris has suggested that more realistic and ambitious housing targets will be set in the Budget. It is imperative that any such targets are delivered on.

“While housing commencements are at record levels this year, we are simply not building enough properties quickly enough.”