Ninety homes a day must be built for 10 years to meet rise in public demand

Central Bank economists report shortage since 2011

THERE is a massive unmet demand for housing due to population growth, inward migration and changes in household formation.

New research by Central Bank economists indicates that 34,000 new housing units are needed each year until 2030.

This works out at around 90 houses a day that need to be completed for the next 10 years.

Not nearly enough houses have been built in the past eight years, the research found.

Around a third of the housing units needed are being built.

Economists Thomas Conefrey and David Staunton base their projections on net inward migration of 30,000 people a year.

This is in line with the trend last year and the year before.

If net migration was to fall to 10,000 a year, then they estimate 26,500 new housing units would be needed each year up to 2030.

This country should have been building 27,000 new housing units every year since 2011, the report states.

But the Central Bank economists calculated that just 10,500 housing units have been completed annually in the time period.

“Growth in population has significantly exceeded the increase in the housing stock since 2011 and the average household size has risen, reversing a previous long-running trend,” the Central Bank said in a statement accompanying the research paper.

The economists said that in order to keep pace with population growth and changes in household formation, their estimates indicate an average of around 27,000 dwellings would have been required a year between 2011 and 2019, according to ‘Population Change and Housing Demand in Ireland’.

The numbers making up a typical household have been falling, and are converging to UK rates.

Smaller households, as people have smaller families and more singles form households, mean more housing units are needed.

The economists found that in each of a number of scenarios they examined, levels of residential completions are well below estimated future demand, implying a need for further expansion in the supply of new dwellings.

At the peak of the boom in 2006, 93,000 housing units were built.

But following the crash, house construction collapsed. However, the population did not stop growing during those years.

The new paper comes as the latest Construction Purchasing Managers’ Index found housebuilding activity has slowed for the first time since 2013.

This week’s Ulster Bank construction survey indicated that the industry’s slowdown overall moderated last month.

The headline measure of activity rose to 48.2 from 46.2, moving towards the 50 level that marks the point of growth versus contraction.

But home construction fell below 50 for the first time since June 2013, slumping to 47.7 from 51.3 in October.

It comes as house price rises have moderated. Prices have risen so much that many buyers are precluded from borrowing enough to buy a home under Central Bank lending restrictions.

Last week the Central Bank decided not to make any changes to its lending rules.

Regulators have estimated prices would be between 15pc-25pc higher than at present without the rules.

And it emerged that soaring property prices are pushing more people to buy homes in the commuter counties around Dublin.

One in five housing units being constructed is now an apartment, the highest share since records began.

Figures from Banking and Payments Federation Ireland show an 81pc increase in the construction of apartments between July and September, compared with the same quarter last year.

Many apartments are being snapped up en masse by cuckoo funds, denying firsttime buyers the opportunity to buy them.

27,000 homes should have been built but only 10,500 units have been completed