Building 52,000 homes annually over a 25-year period will be necessary to meet the country’s pent-up housing demand and ongoing population expansion, according to Central Bank estimates, reports RTE.
It has also predicted that over 70,000 units would need to be built annually if the government wished to fulfil demand and close the housing shortfall over the course of ten years.
According to the bank, the housing shortage that has led to thousands of individuals sharing rental apartments or living with their parents has been developing over the course of a decade as house construction has lagged behind demand.
Taoiseach Simon Harris stated that the report’s conclusions about pent-up demand were not shocking as he entered Cabinet, reports RTE.
He declared that in addition to looking for ways to continue funding the Land Development Agency, the government was committed to keeping the Help to Buy Scheme in place.
“It makes me all the more determined to look at how we can further support agencies and work on what we know is working (in housing). We are spending a serious amount on housing, amongst the very highest in Europe and that’s right and proper, to catch up for that decade of loss due to the financial crash. I’ve been talking this summer about what we can do around infrastructure, what we can do about the sale from bank shares, indeed, what we can do with the Apple revenue, I think there’s real possibilities here in relation to housing”, reports RTE.
33,000 dwellings were finished last year, and the government has stated that more would be constructed this year.
According to the Central Bank’s prediction, just 32,000 will be finished in 2024 before the number starts to rise the following year and the year after that.
According to Mr. Harris, the government will announce new housing goals for the second half of the decade before year’s end.
Over the past ten years, the State has dramatically boosted housing investment, going from €1 billion to €6.5 billion annually, according to the Central Bank.
However, it stated that in order to meet demand, the planning system must be strengthened, more serviced land must be made available, and private enterprise must be given more incentives to invest.
It also stated that there has been a lack of investment in machinery and equipment because of the damage the financial crisis caused to the building sector, reports RTE.
It claimed that small businesses, which lack the economies of scale of larger enterprises, were overly dependent on the building industry.
The Central Bank’s director of economics and statistics Robert Kelly said: “We have calculated the significant economic costs of policy inaction prolonging the imbalance between housing demand and supply,” reports RTE.
He added: “These will result in a higher cost of living, and in turn, a higher cost of doing business in Ireland, ultimately damaging our global competitiveness and the sustainable growth in living standards for the people of Ireland in the medium-term,” reports RTE.
Concurrent with the release of a housing report, the Central Bank has revised its projections for the economy.
They predicted that in 2025, the domestic economy will rise by 3%, up from 2.4% this year.
This year, the proportion of workers will increase by 3.4%, while the unemployment rate will stay low at 4.3%.
In the first half of 2024, employment rose by 47,800, with foreign workers contributing 47% of the growth, reports RTE.
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