Ireland’s housing crisis may be more severe than previously thought, according to a new report from the Central Bank. The bank estimates that the country needs about 52,000 new homes each year until 2050 to meet demand – a significant increase from current projections.
This figure is nearly 20,000 more than the 32,695 homes completed last year and far exceeds the government’s Housing for All strategy, which aims for 33,000 new homes annually until 2030.
Robert Kelly, Director of Economic and Statistics at the Central Bank, explained that this higher estimate is due to “pent-up demand for housing and an increased housing need for our growing population over the coming decades.”
The report highlights several challenges in meeting this ambitious target:
- Planning and regulation: Complex planning processes are delaying construction, with over 20,000 housing units awaiting decisions.
- Industry capacity: The construction sector’s productivity is low by both historical and international standards.
- Financing: An additional €6.5 to €7 billion in development finance would be needed annually to fund the extra 20,000 units.
While the government has increased housing spending to €6.5 billion per year, the Central Bank warns that public funds alone won’t solve the problem. The report calls for policy changes to streamline planning processes, improve construction sector productivity, and encourage private investment.
However, Kelly cautioned that rapidly increasing housing output comes with its own risks, saying, “The costs and risks of poorly managing a rise in housing output are similar to those posed by inaction.”
According to The Journal, as Ireland grapples with this housing challenge, it’s clear that innovative solutions and careful planning will be crucial to meet the growing demand for homes in the coming decades.