The bedrock of any Government’s planning is demographics.
The number of people living in a country and a reliable forecast for population growth are vital.
That is why this week’s figures from the Central Statistics Office are critical to understanding how to fix Ireland’s biggest problem – housing.
For the fourth year in a row immigration exceeded 100,000.
Of course those arriving in Ireland are not all originally from other countries – nearly 32,000 of the 125,000 who came last year were returning Irish citizens.
The important figure is “net migration” or the number of people arriving in Ireland minus those leaving to live abroad. That was almost 60,000 for the 12-month period to April 2025.
Add to that the natural increase in the population, births less deaths, which were almost 20,000 – and it means the population is continuing to rise rapidly with almost 80,000 additional inhabitants in the past year.
There are now 5,458,600 people living in the State, according to the latest estimate.
In July of last year, the CSO produced a forecast with three scenarios for population growth.
Now the latest estimate shows the population is already growing marginally faster than the CSO’s high growth scenario and is 35,000 above the central scenario.
More inhabitants mean more demand for housing.
But that requirement for accommodation comes on top of an enormous existing shortfall.
Last year experts on the State’s Housing Commission estimated the housing deficit was equivalent to 250,000 homes.
One member of the commission – the chief economist of Goodbody Stockbrokers Dermot O’Leary – says that based on the profile of people coming to live in Ireland it is reasonable to assume a future household size of 2.2 persons.
Mr O’Leary says the deficit in accommodation increased by 100,000 over the past decade alone.
He suggests two measures within the Government’s control which could be used to tackle the housing crisis.
First, address the lack of serviced land with water and electricity connections, and second, tackle delays in the planning system.
While housing output is rising, it is simply not increasing quickly enough to keep pace with the growing population.
Minister for Housing James Browne announced several initiatives over recent months to boost residential construction.
Significant changes to loosen rental caps are expected to be voted through the Oireachtas this autumn – although they will face vocal objections from the Opposition.
Minister Browne also announced a relaxation of standards for construction of apartments.
Both measures have downsides for tenants and implications for the quality of future accommodation. But the Government judges them necessary to attract foreign funds to finance the construction of apartments, after an alarming 24% drop in output last year.
Another factor which may help to attract investors is lower interest rates as the European Central Bank pulls back from fighting inflation.
Rates are now 2% down from their high of 4% two years ago. That will make some projects which were financially unviable in recent years more feasible.
The latest data on immigration suggests the population is growing at 1.5% to 1.6% per annum.
Many of the people coming here are attracted by the strong economy and employers who need their skills – particularly in the health service.
One argument which has been ventilated recently suggests reduced immigration would lessen pressure on housing.
On the surface it would seem to make sense but dig a little deeper and it appears the facts do not back that up.
Dr Michael Byrne of University College Dublin says: “The entire anti-immigration argument is premised on the assumption that housing demand can be reduced without any impact on housing supply.”
He argues evidence shows that about 20% of workers in the construction industry are migrants.
So, while less immigration growth might dampen some of the demand for housing it would also crimp the supply of new homes.
Dr Byrne says a reduction in immigration “could lead to a modest reduction in prices and rents, but this would, at least to some extent, be offset by reduced supply.”
He says the impact of reduced immigration in terms of affordability and availability “would likely be reasonably small.”
It would also impact on economic growth and key sectors like health and social care, which would struggle for skilled staff, he adds.
Another factor is that immigrants tend to be occupants of build-to-rent apartments – consequently, any drop in numbers arriving into Ireland could dampen investor appetite to fund more apartments.
Dr Byrne says the argument that reduced immigration significantly lessens pressure on housing is not substantiated by evidence to date.