We must look honestly at the data on housing and migration

Immigrants increase demand for housing, sometimes driving prices up — but they also play a key role in supply 

People waiting to view the show homes at Bayly Hill, Carr’s Hill, Cork. Migrant workers are an important factor in the development of new housing, as they account for about 20% of construction workers in Ireland. Picture: Dan Linehan

SHOULD immigration be curbed to relieve housing pressure? This idea is sure to gain more traction over the coming years, and needs to be tackled head on.

The standard left-wing response to linking immigration and housing is to deflect blame: “Migrants aren’t the problem, government policy is.”

While this is morally commendable and politically prudent, it risks evading the straightforward question: Would reducing immigration materially improve the housing crisis?

After looking at the evidence, I believe the answer is: only marginally, and at a broader cost. Nonetheless, this issue must be confronted honestly — especially by those of us committed to reducing inequality and building inclusive societies.

Before jumping in, it is worth stating my ethical position clearly: Wealthy countries such as Ireland have a moral obligation to receive both refugees and economic migrants. In a global system where capital flows freely and wealth is concentrated in the Global North, closing borders to those seeking opportunity or safety is indefensible.

That said, moral obligation is not absolute. Rich countries are not obliged to sustain levels of immigration that generate significant inequality or threaten social cohesion. Democratic legitimacy and public trust are, in part, grounded in the perception of fairness and manageability in public services — including housing.

Worldwide studies

So, what does the evidence say? Research on the direct impact of immigration on house prices and rents is limited but growing. Researchers in the US have shown that a 1% increase in a city’s population due to immigration led to a 1% increase in rents and house prices. Other studies from around the world have found similar price pressures. A Spanish study, for example, found that large influxes of immigration into Spain over the period 2000-2010 led to an average 1.5% annual increase in the working-age population. This caused an annual increase in house prices of about 2% and immigration was responsible for about one quarter of the total increase in prices over that period.

It should also be noted that immigration can lead to reduced prices/rents at a local level. One US study, for example, shows that an increase of immigrants as a proportion of local population from 0% to 30% led to a fall in house prices of 6%. This is attributed to a kind of “white flight” phenomenon. Research has also found that immigrants are willing to pay a modest price premium to live near co-nationals, while natives are willing to pay premiums to avoid neighbourhoods with large immigrant populations.

In Ireland, migration is sharply divided along class lines. On average, migrants are better educated and more likely to be in employment than native-born Irish, but this averages over two distinct groups: highly skilled tech workers on the one hand, and low-paid service or care workers on the other.

This division matters. High-income migrants may indeed contribute to price pressures in the upper end of rental and sales markets, particularly in urban centres. But the lower-paid cohort, often employed in essential sectors such as hospitality, health, and construction, are themselves among the most affected by the housing crisis.

The anti-immigration argument is based on the idea that we can reduce housing demand by limiting immigration, without, at the same time, reducing supply. This is simply not true

What these narratives overlook is the role of migrants in expanding housing supply.

As of 2023, there were 27,500 migrant workers in Ireland’s construction sector, representing about 20% of workers. In the US, that figure was 34% in the same year. In Spain, researchers estimate that immigration accounted for half of the country’s construction boom in the 2000s. Without these workers, capacity would be significantly reduced, and timelines delayed. Moreover, migrants often accept lower wages, which may reduce construction costs and, in turn, temper housing prices.

Our National Competitiveness and Productivity Council have argued that migrant construction workers will be an important part of meeting supply targets over the coming years. But migrants also drive investment. Ireland’s build-to-rent sector, for example, is geared toward higher-income international residents. The existence of a large group of younger households looking to rent is a cornerstone of their investment strategy. A significant drop in immigration would likely cool investor interest, further tightening supply.

In short, while immigrants increase demand, they also materially expand supply. Focusing on one side of the equation is simplistic and misleading

The evidence suggests that cutting immigration might lead to a limited, short-term easing of house price and rent growth. But this effect is likely to be offset by slower construction, weaker investment, and economic costs across essential sectors — particularly healthcare, retail and services, and foreign direct investment. There are also substantial fiscal and human costs associated with enforcing reduced immigration. To claim that restricting immigration would solve the housing crisis is, in short, not supported by serious evidence.

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That does not mean immigration policy should be off-limits. But it does mean the housing crisis will not be resolved by closing borders. If anything, fixing housing requires increased public investment, planning reform, reform of the financial system, and measures to tackle hoarding and speculation. Immigration may be part of the housing equation — but it is not the variable we should be obsessing over.

Let’s direct our energy toward fixing the system, not blaming its newest participants.

Michael Byrne is a lecturer at the school of social policy, social work and social justice, University College Dublin, and author of the Week in Housing newsletter on Substack