Ireland is facing one of the worst housing crises in the European Union, and according to the Irish Central Bank, the country needs an additional 20,000 homes built annually to catch up with demand. The current shortage stems from over a decade of under-supply, compounded by rapid population growth, which has led to skyrocketing housing costs—double the EU average in 2022. The bank's report highlights that the nation will need to build around 52,000 homes each year until 2050 to meet demand.
Ireland is facing one of the worst housing crises in the European Union, and according to the Irish Central Bank, the country needs an additional 20,000 homes built annually to catch up with demand. The current shortage stems from over a decade of under-supply, compounded by rapid population growth, which has led to skyrocketing housing costs—double the EU average in 2022. The bank's report highlights that the nation will need to build around 52,000 homes each year until 2050 to meet demand.
Despite recent increases in housing supply, with over 30,000 homes built in 2022-2023, the target of 33,000 homes per year may not be enough to stem the crisis. House prices continue to climb, with a 9.6% increase in the 12 months ending in July 2024, making it even harder for most residents to afford homes. Many businesses, including Ryanair, have resorted to purchasing properties to rent to their employees, underscoring the severity of the issue.
Housing Shortage: A Threat to Economic Growth
The Irish government has already ramped up its housing budget to €6.5bn per year, making it one of the largest in the EU. However, the Central Bank warns that delays in building more homes could have long-term economic consequences. The lack of affordable housing and high living costs could harm Ireland’s competitiveness and sustainable growth, especially as businesses face rising operating expenses due to the housing crisis.
In its report, the Central Bank also emphasized the need to modernize Ireland's building sector, which has struggled with low productivity since the financial crisis. Small enterprises dominate the sector, and there is a need for more investment in equipment and advanced technologies to increase efficiency. Between €6.5bn and €7bn in additional annual spending will be required to meet both present and future housing needs, according to the bank.
The government’s "Housing for All" plan is an ambitious attempt to provide affordable housing for every citizen, but there is still a long way to go. As demand for housing continues to outpace supply, Ireland must invest more and build faster to avoid deepening the crisis.
Source: Euronews
Kommentare