'House prices unlikely to drop for at least another decade'

Oireachtas housing committee is also warned that in future decades there may not be enough people working to cover the pensions of Ireland's growing proportion of retired people 

A principal officer with the Department of Finance warned the Oireachtas housing committee that it will be the late 2030s at least before supply meets demand. Stock picture: Steve Parsons/PA 

House prices in Ireland are unlikely to drop for at least another 10 years given the lack of supply of homes, an Oireachtas committee has been told.

The Oireachtas housing committee heard that, at the current rates of housing delivery, it would be the late 2030s at least before supply would meet demand.

Some 130,000 properties are needed to meet the demand of prospective homeowners, not counting the 60,000 new residences required to be delivered on an annual basis just to keep pace with current demand.

Kevin Daly, a principal officer with the Department of Finance, noted that in modelling the future demographics of the country, via its Future Forty report series, the Department does not take into account rental or housing costs.

However, he added that his “personal view” would be that if “demand is exceeding supply then you wouldn’t see prices going down”.

“That’s just basic economics,” he said.

Ageing population 

The committee heard that under Future Forty’s central modelling scenario, the population of the country will be 6.8m by 2065, up from 5.4m currently, with a far greater proportion of people above retirement age than is currently the case.

That in itself will “reshape Ireland’s labour force and increase demand for age-related services”, Mr Daly said, noting that a higher fertility rate or greater levels of migration “would ease pressures but only marginally”.

In terms of the economic headache facing the country — that in roughly 25 years there will not be enough people of working age to cover the pension requirements of the larger cohort of those over 65 — Mr Daly said the fact more and more of those pensioners will be paying exorbitant rents if the current trends continue is an issue “we haven’t looked at”.

Office of the Planning Regulator CEO Niall Cussen said housing is “top of our priority list” but added that there “is a certain amount of groundwork to do in terms of deliverability of this”.

“We fully support the housing growth requirements,” he said.

The committee heard that, together with the infrastructural challenges posed by the need to develop properties nationwide, the country has a further issue in that the provision of sufficient social amenities such as sporting and recreational areas is not keeping up with demand. Mr Cussen said: 

There is a little bit of a miss in relation to the social nature of things in planning requirements and technical requirements.

"That’s what the research is pointing to.”

Mr Cussen described sporting infrastructure as “very often the Cinderella of the infrastructure landscape”, noting that the sheer number of stakeholders in terms of planning development often mean “the need for sporting infrastructure is not understood”.

South Dublin People Before Profit TD Richard Boyd Barrett raised the “shocking” issue of the massive Cherrywood development in his constituency which he said will see two Olympic size ice hockey rinks developed “that no one asked for”.

He added that local GAA and soccer clubs are “crying out” for new astroturf pitches which he said the local authority won’t build because research based on “English data” says those facilities are not required.