Moving target: Irish housing requirements keep rising

When the State was only building a trickle of homes in the wake of the 2008 crash (we were building fewer than 10,000 a decade ago), experts estimated that the level of structural demand in the economy was 30,000-35,000.

People wondered if we had the requisite manpower and resources to build to that rate. It seemed a long way off.

Last year, new dwelling completions hit 33,000 units but now the goalposts have shifted with most agencies and commentators suggesting we need 50,000 new homes a year. Reflecting this new target, Taoiseach Simon Harris pledged to build 250,000 homes over five years in his maiden speech as Fine Gael leader recently.

The Economic and Social Research Institute (ESRI) will publish Government-commissioned research later this year, estimating the underlying level of housing demand in the country right now. It is expected to be in excess of 50,000. Harris might have had a sneak preview hence his pledge.

According to stockbroker Davy, the goalposts have shifted again. In its latest economic commentary, it estimates the State needs to build almost 85,000 new homes a year to address the structural shortfall in housing.

A key demand driver is population growth. Davy forecasts the Republic’s population will grow to 5.9 million by 2030, which it notes is 524,000, or 10 per cent, ahead of the Government’s National Planning Framework (NPF) baseline of 5.36 million.

Closing Ireland’s housing shortfall compared with other European countries based on these population projections would require just under 85,000 units a year until 2030, or 2.6 times the 2023 level of completions, it says.

The key, of course, remains finding the resources to meet any of these targets. A Department of Finance report this week says we need to find €20.4 billion a year - more than 80 per cent of it from private sources - to meet the 50,000 homes a year target.

And then there is the challenge of finding the workers to do it at a time of acute labour shortages, with rising direct and indirect cost issues hampering our ability to attract the bodies required.

On an optimistic note, Davy believes new dwelling completions will rise to a post-crash record of 42,000 next year albeit while noting this remains “well short of our estimate of underlying housing need”.

Top Stories

Aer Lingus prepares for pilots' industrial action

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World of Work

Employers score poorly on interview feedback

A colleague’s daughter is keen to change jobs and has been on the interview treadmill for the last while. She is realistic about the vagaries of the application process and accepts that it will take time for the ideal job to land in her lap. What’s causing her huge frustration, however, is the complete lack of feedback that seems to go hand in hand with the “thanks, but no thanks” rejections.

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Click to read the full article

In Other News

O'Gorman edges ahead of Hackett in battle to lead Green Party

Roderic O'Gorman took an early lead in terms of public endorsements from the Green Party's elected representatives as the contest to become the next leader of the party shapes up as a showdown with one other candidate — Pippa Hackett.

By Wednesday evening, 12 of the 23 Green Party councillors returned in the local elections had announced they were supporting Mr O’Gorman compared to one for Ms Hackett. However, her supporters were out from early morning to bat for their preferred candidate with party chairwoman Senator Pauline O’Reilly, Minister of State Ossian Smyth and TDs Brian Leddin and Steven Matthews backing her before she confirmed she was running on Wednesday afternoon..

Among those backing Mr O’Gorman are Ministers of State Malcolm Noonan and Joe O’Brien as well as TDs Marc Ó Cathasaigh and Patrick Costello. This leaves O’Gorman with 16 backers to date compared to Ms Hackett’s five. Ultimately, regardless of declarations of support from public representatives, the more than 4,000 members of the Green Party will determine the winner through the one-member, one-vote system.

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2. Number of migrants seeking help to return home rises by 60%
3. Harbour Kitchen review: This is a cracking coastal restaurant
4. Property developer makes €70m-plus bid to buy car park beside Dublin Airport
5. Heat emergency declared in US with millions urged to stay indoors

Inside Business podcast

In Inside Business, Barry O'Halloran explains the potential impact of Aer Lingus pilots work to rule on holiday and other travellers over the coming weeks while Conor Pope explains what protections are in place for those booking independently or through a travel agent.

Host Ciarán Hancock also talks with Irish Times London Correspondent Mark Paul, who has been on the campaign trail around the UK with the Tories and Labour.

Highlights this week

• Contract work: A post-crash embargo on recruitment in the public service saw a reader take up contract work as a sole trader. But after a decade in the same role, they find themselves out of work with no redundancy, no recourse, and no class A PRSI contributions. Are there European laws that should have been implemented safeguarding employment rights, they wonder, and is there likely to be any recourse for those whose lives have been so drastically affected?
• Personal Finance: Changes look to be on the way to the tax treatment of investments in Ireland, following an extensive recent consultation, and a commitment by Minister for Finance Michael McGrath to implement some revisions, but this is unlikely to happen for some time. In the meantime, if you are looking for a diversified investment that is liable to capital gains tax at 33 per cent, rather than an exit tax at 41 per cent, what do you need to know?
• Commercial Property: Dún Laoghaire-Rathdown County Council is understood to have agreed a deal to pay Nama about €18 million for a prime residential development site with scope for up to 370 homes just off Brennanstown Road in the south Dublin suburb of Cabinteely.
• Technology: One of the last to announce its intentions on generative AI, Apple unveiled its plans at its Worldwide Developer Conference last week, quietening some of the speculation around its ability to innovate. It will build AI tools into its operating systems for iPhones, iPads and Macs, creating Apple Intelligence and transforming Siri from a voice assistant to a more useful digital assistant.

One to Watch

The Central Bank publishes a report on mortgage switching in Ireland on Friday while Michael McGrath and Paschal Donohoe will be busy at the penultimate meeting of Ecofin ahead of a summer break.

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