The first step towards tackling any problem is to agree that we have a problem

The second step is to agree what that problem is – the Housing Commission has just taken Ireland a step closer to this.

We have mentioned the Housing Commission here on several occasions. In the midst of the current housing crisis, this Commission is the industry’s hope for reason, for reasonable assessment of the marketplace and for genuinely workable policy approaches. 

It turns out that our hope was well placed. This body, through research that is as yet unpublished, has delivered a stark warning that Ireland needs to build up to 62,000 new homes per year until 2050 in order to meet demand – almost double the annual target set by the Government’s National Development Plan. This figure is based on “plausible scenarios” for overall population size, average household size and rate at which current housing stock becomes obsolete. 

The research suggests that population growth due to higher migration could drive up the baseline requirement for houses between 35,000 to 40,000 annually; and with obsolescence of pre-2022 housing adding an additional 7,000 to 17,000 annually, these figures will need to be taken into account when assessing target numbers. The paper also argues that existing assessments have a flawed assumption about household sizes staying constant; however it notes this convergence stopped during 2010s when building slowed down significantly. 

In response to the findings, Taoiseach Leo Varadkar recently said “it makes sense” to revise targets upwards given demographic pressures and arrivals from Ukraine – many of whom are now expected to settle permanently in Ireland and to contribute towards increased demand for housing. In light of this statement and the research conducted by the Housing Commission, it is increasingly evident that the Government needs to reassess plans for future home building in order to ensure adequate supply meets ever-increasing demand. The industry has been saying this for years; but maybe the State needed to hear it from the Commission?

And it’s not just about the numbers. Frankly, greater attention needs to be paid to the different demographics and how these impact the overall need for housing by type and tenure. Factors such as influxes of migrants and changing house-hold sizes should not be overlooked when developing strategies for home construction into the future; and policy makers will have their work cut out in attempting to create viable solutions that can accommodate both current trends and long term plans. 

The importance of accepting and then meeting these new targets cannot be understated. Ireland’s housing delivery is being failed by poor policy and unless proactive measures are taken now – and given the right amount of time to work – we might well be facing another decade of severe housing shortages. 

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group