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Increasing Demand for Housing Requires Significant Increase in Supply of Housing

Increasing Demand for Housing Requires Significant Increase in Supply of Housing
29 Jul 2015

Increasing Demand for Housing Requires Significant Increase in Supply of Housing

The National Statement of Housing Supply and Demand 2014 and Outlook for 2015-17 finds supply and demand balance a key challenge

 

 

29 July 2015

 

As part of a wide suite of initiatives addressing housing supply which have been underway since the publication of Construction 2020, this Statement is the first of a series of annual reports which will inform how Ireland meets demand for housing into the future.

The Housing Agency today released its first National Statement of Housing Supply and Demand 2014, and Outlook for 2015-17.

 

The National Statement provides key data and analysis on the housing supply and demand trends in Ireland as well as an overview of future housing requirements. The analysis gives clear insights into housing in Ireland and presents the most up-to-date information available in relation to housing supply and demand which will keep key housing initiatives on track and ensure we have accurate data about how housing needs are being met on an annual basis. The report shows that while the housing sector is showing signs of recovery, the pace of demand is growing faster than supply.

 

Key findings and analysis from the first National Statement of Housing Supply and Demand include the following:

 

·         Demand for housing will continue to increase in accordance with population trends and a reduction in household sizes

 

·         Supply of new housing needs to increase to meet demand, with supply and demand balance a key challenge

 

·         Affordability is an issue for households in the greater Dublin area, renters and single person households

 

·         House prices have increased, particularly in the Dublin area with the median price nationally being €152,000 (up from €140,000 in 2013) and €260,000 in Dublin (up from €220,000 in 2013)

 

·         Rental prices have also increased, particularly for apartments, nationally rents are 6.9% higher in Q1 2015 compared with Q1 2014  (9.6% higher in Dublin and 5.3% higher outside Dublin)

·         Mortgage Arrears and Negative Equity remains a serious concern, with a total of 110,366 mortgages in arrears at the end of 2014

·         The population is at its highest in 150 years at 4.5 million people, and housing demand is high as a result

·         Household requirements have changed and the average household size has fallen dramatically, proportional household composition has changed and we see an increase in smaller households and a corresponding decrease in larger households. The average household size in the country has fallen significantly over the last 9 years, from an average of 3.04 in 2002 to 2.77 in 2011. Based on an assessment of regional trends, it has been calculated that it will fall further to 2.67 by 2018 – the majority of new housing will now accommodate fewer people

·         The Residential Land Availability Survey shows the total area of available zoned land nationally is capable of supporting over 414,000 housing units

·         Rental levels have decreased in the period 2007-2014 with a gradual increase in 2014.

 

Speaking at the launch, Minister for State with responsibility for Housing, Mr Paudie Coffey said:

 

“This Statement being launched today forms part of a key action (action one) under Construction 2020, which commits to developing a National Framework for housing supply and an annual statement of projected housing requirements. It provides a much-needed analysis of the true picture of housing supply and demand in Ireland along with future projections, allowing for emerging imbalances to be identified and rectified at an early stage.”

 

The Minister further added that the Statement “contributes greatly to an overall understanding of housing needs in Ireland, ensuring that the most up to date and comprehensive data is available relating to current housing supply and emerging needs.  Importantly, this data will help ensure policy responses are evidence-based and needs-led, as we endeavour to build sustainable communities for the present and future generations.”

 

Speaking at the event, Dr Conor Skehan, Chairman of the Housing Agency, said:

 

“Since the publication of Construction 2020, the pieces of the jigsaw are now in place to ensure housing needs are met through a whole suite of initiatives which are underway– including those addressing issues such as housing supply, housing land availability, and provision of social housing. Keeping those initiatives on target requires accurate data and progress reports on extent to which these needs are being met. This is the first of a series of annual reports to deliver a state of the nation picture of what housing needs are and how we are addressing housing supply.

 

Housing is a complex issue – and accurate, timely and up to date data helps us fully understand what the demand looks like, it gives us the opportunity to ensure that new housing supply is the right type, in the right place, and the right size, and, crucially, that it is affordable.

 

What is clear is that increased supply will be gradual as the sector begins to recover. However, a substantial step-up in housing output is required over the next three years to meet this increasing demand.”

 

Note for Editors

 

The full Report can be accessed on the Housing Agency website at www.housing.ie/

 

For further information, contact:

 

Ciara O’Connor at the Housing Agency Communications Office: 01 6564171 or communications@housing.ie