40,000 new homes needed to prevent shortfall growing - report

The annual supply of new houses needs to increase to 40,000 units next year, just to maintain the status quo and avoid making the existing shortfall in supply even greater, a new report has claimed.

If the National Housing Target, which aims for 33,000 homes to be delivered each year until 2030, is achieved, then the current shortfall in housing would rise by another 49,000, the study predicts.

That would be on top of the current cumulative shortfall in housing units which has grown to 116,00 since 2017, the annual housing report produced by Initiative Ireland says.

The shortfall comes despite a 40% increase in new houses and apartments finished last year, the analysis states, with the total constructed hitting 28,000.

If output were to rise to meet existing demand plus make up the huge shortfall, Initiative Ireland estimates that 48,000 homes would have to be built next year and 73,000 every year for the following five years.

"In addition to measuring the supply of housing against new demand, it is essential we acknowledge the level cumulative shortfall which has built up in this country and the factors contributing to that shortfall," said Padraig Rushe, Initiative Ireland CEO.

The company calls for a radical overhaul in the planning process, such that approvals could rise by 300% over the next five years.

This would require major changes to enable the availability and viability of sites with full planning permission to rise, it claims.

The research predicts that prices for first-time buyer properties will continue to grow, driven by household income growth and changes to the Central Bank's mortgage lending rules.

It says that if they were to buy rather than rent their current or even a better home, many households could save between 20% and 50% on housing costs, such is the high cost of renting.

Initiative Ireland is a private Irish owned financial services firm and social enterprise that aims to deliver societal and environmental impact through the financing and investing it carries out.

An Enterprise Ireland High Potential Start-Up, the firm currently provides capital to private developers and Approved Housing Bodies and has capacity to lend up to €300m a year.

Reporting: RTE News