Ireland needs 50,000 new homes a year, IDA chair says

Feargal O’Rourke said feedback from companies is that home building needs to increase to around 50,000 units a year, far ahead of the current 30,000 target.

That higher figure would be at the the top end of expert opinion on the true level of housing need. Construction sector economists have mixed views depending to a significant extent on how much pent up demand has built up during the period of undersupply.

“What’s coming back is actually, those targets aren’t high enough. We need maybe 50,000 next year,” he told the Oireachtas joint enterprise committee on Wednesday.

“It has been referenced by inward investment, it’s not proving a negative factor yet for us. The impact on [foreign direct investment] is of a very secondary or tertiary nature.

“The optimist in me would say we had the same housing pressures last year, and yet it was a great year for foreign direct investment.”

According to Mr O’Rourke, 2023 was a "turbulent year” but a strong one for inward investment in Ireland.

Direct employment in IDA client companies now stands at 300,583. Overall, 248

investments were approved by the IDA in 2023 with the potential to create almost 19,000 jobs, he said.

Today's News in 90 Seconds - February 21st

However, Mr O’Rourke said that Ireland needed to maintain progress on building new housing, infrastructure, and utilities or there would be “issues” in future.

“The opportunity cost of not addressing these issues in a timely manner, particularly sustainable energy supply, risks being sizeable,” he told the committee.

"We’re still ahead of the game.

“I don’t think we can afford to slow the progress we’re making on grid investment, renewable power investment, housing. If we slow the progress, we will run into issues.”

Mr O’Rourke compared the Irish economy to “Limerick in hurling or Shamrock Rovers or Manchester City in football".

“We have a fantastic record of success, but once the year or season is over, we must do it all over again. We can survive a year where we are not top of the pile – but we cannot afford to enter a period where we are living off past glories.”

His comments come the same day as a report by Goodbody stockbrokers found that home building in Ireland is suffering from a serious lack of scale, with the top 10 builders accounting for only one-third of all commencements last year.

This lack of scale "threatens the attainment of Ireland’s housing requirements over the coming years” the report says.