With the Irish housing market remaining at such a loss, it is important that we recognize what the core foundations are that act as a basis for continuing growth. By recalling these foundations and working to improve them, there is a stronger potential to understanding the true issue with the overall crisis.
Last year, Ireland experienced the highest number of home construction since 2009. With 19,271 homes built to create a growth of 29%. Though an impressive improvement, this number still falls substantially below the goal number of newly constructed homes.
This increase, though not the goal, is, however, a good sign of progress and hope for the housing market to finally return to regular levels.
Some other marginal improvements that can be noted in the market currently are; housing commencements were seen to increase by ⅓, the volume of building activity is at a high, and 13,842 new dwelling units have been approved for construction. All in which represent some of the highest improvements since 2009.
Though there are many positive things happening in the housing market, what we are seeing is still far below what we want to be experiencing.
If these improvements do continue, then, in very little time, Ireland should begin to experience what it has been waiting for. An increase in available homes, a decrease in the purchase price, and more homebuyers actually buying.
With the trends that have been recorded in which considered the relevant plans for building, it is predicted that it will not be until the 2020’s that output will rise enough to finally catch up to the increasingly high flow of new demand.
There are many factors important to consider when analyzing the changes in the total household as they often get overlooked and therefore, the market lacks improvement.
Factors to be considered in which influence new household formation are the natural demographics, average household size, and migration inflows and outflows.
With these factors under consideration, it is important to note the predicted changes within them. That is, Ireland is currently known for their particularly youthful demographic and decreasing household size.
The average household size has seen a decrease from 4 children to 2.7 children on average.
However, the decrease in household size is not expected to stay a trend and overall, a population growth of 3.8% over the coming 5 years is expected.
As for the last influencing factor, migration flows impact on housing demand is predicted to be as large as it has been in the many years previously recorded. Migration has actually been a more pressing factor than natural factors.
Digging deeper, one can find various other factors in which affect the demand for housing. An example being that Ireland has had the fastest growing economy in the EU for the previous few recorded years.
A growing economy should be a good sign that it will have a positive impact in the housing market.
Another good sign for the housing market is the fact that unemployment has reached a low, also causing a positive impact to be seen on total household incomes.
Overall, the underlying factors in the Irish housing market seem to be strong and getting stronger. A potentially good sign for the market, however, there is just as much potential for the divide to worsen.
Only time will tell, however, the market is holding a promising foundation.