Between 35,000 and 53,000 dwellings needed per year, based on various projected population growth scenarios

Today (Tuesday, 2 July 2024) the Economic and Social Research Institute (ESRI) publishes a report, funded by the Department of Housing, Local Government and Heritage, that estimates the number of housing units needed based on projected population growth at a local authority level.

The research presents a range of scenarios for future structural (demographic) housing demand. It considers a range of population projections based on mortality, fertility and various international migration assumptions. It then estimates future structural housing demand based on these population projections, as well as a range of assumptions regarding Ireland’s typical household size and the obsolescence rate of the housing stock. Across all scenarios, assumptions are driven by data including the most recent Census, international trends, and the research evidence. This report focuses on structural (demographic) housing demand. Total housing demand includes this structural element as well as what is referred to as ‘pent-up’ demand.

Key findings: 

  • Taking the average over all twelve scenarios, structural housing demand is projected to be around 44k per year from 2023-2030, and around 40k per year over the 2030-2040 period.  
  • In the Baseline population scenario, estimated structural housing demand in the period 2023-2030 ranges from around 38k to 50k per year depending on assumptions around household size and obsolescence rates.
  • As international migration is the key driver of population growth in Ireland, additional scenarios are explored that incorporate higher and lower international migration assumptions than in the Baseline scenario.
  • In a high migration scenario, the estimates range from around 41k to 53k per year.
  • In a low migration scenario, the estimates range from 35k to 47k per year. 

Population growth 

  • In the Baseline population scenario, the population is expected to increase by 922k between 2022 and 2040 resulting in a total population of over 6.1 million people by the end of the period. This implies significant overall population growth of 1.0 per cent on an annual average basis. In the near term, in the Baseline population scenario, the population is expected to increase by 516k between 2022 and 2030 or to grow by 1.3 per cent per annum.
  • In a high international migration scenario, the population grows by an average of 1.2 per cent per year, reaching 6.3 million by 2040.
  • In contrast, under a low international migration scenario, the population grows by 0.8 per cent per year, resulting in a population of around 5.9 million by 2040.
  • While population growth is anticipated in all regions, the Eastern and Midlands region is expected to see comparatively higher population growth concentrated in Dublin and the Mid-East, while the Northern and Western, and Southern regions are anticipated to see comparatively lower growth.

Regional structural housing demand 

  • The research also finds that 46.4 per cent of the structural housing demand over the 2023 -2030 period will come from Dublin, across Dublin City, Fingal, Dublin-South and Dun Laoghaire-Rathdown, as well as and Cork City and County.
  • Structural housing demand for Clare, Donegal, Dun Laoghaire-Rathdown, Galway County, Kerry, Leitrim, Limerick, Louth, Mayo, Roscommon, Sligo, Tipperary, Waterford, Westmeath and Wexford are higher than the population share in those regions, although the differences are small.

Adele Bergin, an author of the report and an Associate Research Professor at the ESRI, said: “Housing demand, both now and in the future, has significant implications for housing policy in terms of the number of housing units required and the areas they are needed. Our research shows that on average, across a range of scenarios, around 44,000 new units a year are necessary to keep with population growth.”

Paul Egan, an author of the report and a Research Officer at the ESRI, said: “Projections of structural housing demand are sensitive to assumptions including international migration, household size and the obsolescence rate of the housing stock. Owing to the uncertainty in any projection exercise, the research considers a range of assumptions. It should also be noted that all scenarios relate to future demographic housing demand and do not factor in current pent-up demand.”