The Republic of Ireland has the worst ratio of housing supply to population growth compared with nine high-income countries including the US, the UK, Australia, Germany and Spain, according to a new report.
Its population is growing at a rate of nearly four people for every new house built, according to the report by international property group Savills.
“While it is true that many countries across the world are facing housing shortages, it is important to recognise that the severity of Ireland’s is on a different level to others,” said John Ring, director of research at Savills.
Several factors are at play, the report said, including delayed natural population growth, high migration due to strong economic growth and legacy issues as a result of the Celtic Tiger crash in 2008.
“At present, we are running to stay still and a more aggressive approach to promoting new housing supply is warranted compared to our peers,” Ring continued.
The report was published as new figures revealed that Irish residential property prices are now 8.6 percent higher than this time last year, according to the Central Statistics Office (CSO). Prices in Dublin specifically have risen at an even greater rate, rising by 9.3 percent in comparison to just 2.1 percent 12 months ago.
Since August 2023, prices have been rising steadily and are now running close to 11 percent ahead of the Celtic Tiger peak.
According to the CSO, the national median price of a home was 337,000 euros (£287,300) over the year-period to June, up from 335,000 euros (285,600) in May. In Dublin, the median price was 451,000 euros (£384,500), rising to 630,000 euros (£537,100) in the most expensive local authority area for housing in the state, Dún Laoghaire.
The lowest median price was found in Longford, at 169,000 euros (£144,000).
The latest CSO increase was described as “whopping” by Rory Hearne, an academic specialising in social policy and housing and Social Democrats candidate for Dublin Northwest, according to The Irish Times.
“These enormous house price increases come on top of already record high prices for homes,” he said. He described the increases as unsustainable and were leading to individuals and families being “locked out of home ownership” and “trapped living in their childhood bedrooms.”
Eoin Ó Broin, Sinn Féin’s housing spokesman, said the increasing rate was “further evidence” that the Government’s housing plan “is not working”.
“Only a radical reset of housing policy as set out in Sinn Féin’s alternative housing plan will halt the rise in house prices and deliver genuinely affordable homes for working people,” Broin argued.
The Savills report said the Republic had suffered the worst decline in affordability between 2015 and 2022 compared with the other eight countries studied – Australia, Canada, Germany, the Netherlands, Spain, Sweden, the UK and the US.
While highlighting that progress had been made, John Ring of Savills said that the scale of the housing crisis “remains large” and that it was “evident that the market requires significantly more stock,” across the Republic of Ireland to meet the demand for sale and rental properties nationwide.
Kevin Timoney and Colin Sheridan, on the other hand, said the brokers’ expectation that prices would rise by 7.5 percent for the full year was likely to be well short of the mark, even with a typical pickup in the supply of homes that is expected in the second half of the year.
The Government has been aiming to complete 33,000 new homes annually, rising to 40,000 by 2030 under its Housing for All strategy, but is expected to unveil revised housing targets in its 2025 Budget. At least 35,000 new homes and as many as 53,000 may be required each year to meet housing demand, according to the Economic Social and Research Institute (ESRI) in July.