Ireland

ESRI warns of continued housing price surge in Ireland

PNT Reporter | Last Updated : 15th Mar, 2024

Synopsis

The Economic and Social Research Institute (ESRI) warns the Oireachtas Committee on Budgetary Oversight that Ireland's housing prices are on an upward trajectory due to insufficient investment and rapid population growth, resulting in a demand-supply imbalance. Owner-occupied houses have decreased from 79% in 1991 to 66% presently, while average rents in Dublin have soared to EUR 2,102. Ireland's low housing investment, ranked among the lowest in the EU in 2022, exacerbates the crisis. The ESRI calls for increased housing supply targets in light of population growth trends. The crisis disproportionately affects low and moderate-income individuals, escalating homelessness and rent/mortgage burdens. Business and productivity sectors are impacted, with businesses considering relocation due to housing costs, potentially undermining Ireland's competitiveness in attracting foreign investment.

The Economic and Social Research Institute (ESRI) has cautioned the Oireachtas Committee on Budgetary Oversight that housing prices in Ireland are set to keep increasing in the foreseeable future. This trend is primarily attributed to inadequate investment and a rapidly growing population, leading to a situation where demand outstrips supply.

According to the Central Statistics Office of Ireland, the proportion of owner-occupied houses has declined significantly from 79% in 1991 to just 66% presently.

The ESRI, citing data from the Residential Tenancies Board, highlights that the average rent in Dublin stands at approximately EUR 2,102. Furthermore, the institute emphasized in its initial statement that Ireland ranked among the EU countries with the lowest housing investment in 2022, surpassing only Greece, Poland, and Bosnia and Herzegovina. Consequently, the surge in housing prices and rents is expected to persist, albeit at a slower rate for house prices.

Earlier this year, the ESRI stated that the current targets for housing supply are likely inadequate, given the significant population growth revealed by preliminary findings from the 2022 Census. Consequently, a higher level of output will be necessary to meet the demand.

A primary factor contributing to Ireland�s housing crisis is the lower investment, stemming from the lingering effects of the pandemic, elevated inflation, and subdued economic expansion. Additionally, increased interest rates have discouraged developers from assuming excessive debt, resulting in the suspension or postponement of numerous housing projects.

Furthermore, regulatory alterations following the financial crisis, along with zoning constraints, have substantially restricted the availability of affordable housing. The housing crisis In Ireland disproportionately affects individuals with low and moderate incomes, worsening homelessness and leading to a rapid surge in rents and mortgage payments.

Furthermore, the repercussions of the Irish housing crisis extend to the business and productivity sectors, prompting many businesses to either opt or be compelled to relocate from urban areas or even leave the country in pursuit of more affordable housing options. This migration trend could severely undermine the country�s competitiveness, particularly in terms of attracting foreign investment and businesses.

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Ireland

ESRI warns of continued housing price surge in Ireland

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