Estimating Dublin’s Housing Needs

Independent economic analysis and advice

While undertaking research for a recent project we were struck by differences in official and independent estimates of Dublin’s housing needs over the next 20 years or so.

These differences are quite unsettling and could have serious implications for the future performance of the housing market.

They also reflect an underlying tension in economic policy making in Ireland that has not been resolved.


Official Estimates of Dublin’s Housing Needs

The National Planning Framework (NPF) provided projections for population growth up to 2040 for the 5 main cities of Ireland (Government of Ireland, 2018). Using the mid-points of the published projection ranges, the total projected increase amounts to 505,000 people.

It was estimated that an additional 275,000 homes would be required, that is, 1 new home for every 1.84 additional people.

The NPF projected that the population of Dublin City and Suburbs would grow by 235,000 – 290,000 people to 1.41 million in 2040. Therefore, Dublin will require output of 143,000 homes, 6,500 per annum, over 70,000 of which are targeted to be within the existing footprint of the city.

Dublin's Housing NeedsOther official estimates support this conclusion. For example, the Housing Agency estimates that just under 45,000 new units are required in the five main urban areas alone in the period 2016 to 2021 with the same number again required for the rest of the country (Housing Agency, 2017) . The Agency estimated that Dublin requires 6,622 new units per annum in this period.

However, these estimates have been questioned and other research suggests that this greatly underestimates the likely requirements for housing output in Dublin.

Unlike the approach that is taken in the NPF, which sets targets for population distribution and growth and provides projections consistent with reaching these targets, this research generally begins with estimates and trends in the factors that create the demand for housing and builds from this.


Alternative Estimates of Dublin’s Housing Needs

Downey (2017) provides one example. The work stresses the importance of the key role of Dublin in attracting migration from other parts of Ireland and internationally, and emphasises the need to take this into account when planning for housing output.

The research also points to differences in the demographic structure of the Dublin region with higher percentages of people in the household formation age groups than in most other areas, a feature that is unlikely to change in the foreseeable future.

The research concludes that Ireland’s population could increase by 1.6 million by 2040 and that 80% of the increase is likely to be in the East of the country.

This is well out of line with the targeted growth distribution in the NPF which would effectively mean that Dublin would account for just 25% of future population growth.  This NPF target contrasts with the trends that have been seen in recent years where Dublin accounted for almost 43% of net population growth in 2011 to 2016.

To meet current requirements, the Downey research concludes that 60% of housing output up to 2022 needs to be in the Greater Dublin Area. Beyond this, the region would require about 20,000 new units per annum to meet demand.

Dublin's Housing Needs

As the population grows and changes, household size will fall to European levels and there is likely to be a big increase in demand for small apartment rentals, particularly in Dublin.

Partly as a result, the research concludes that 60% of the housing output in the Dublin region should comprise apartments and other small, high density housing units. This structure of output is not out of line with other European capitals but contrasts with the existing stock of Ireland’s housing where apartments account for only 12% of the total.

The research estimates that there is currently a deficit of 150,000 apartments in Dublin and an ongoing demand for 12,000 new apartments in the city each year.

Research by Lyons (2017) adopts a similar approach to the projection and reaches broadly similar conclusions. It points to the fact that job creation has been strongest in Dublin and that both internal migration and inward migration will be impact mostly on demand in the Dublin area.

His disaggregated analysis estimates that a total of 81,500 homes are required in the Greater Dublin area, over 16,000 per annum, in 2017 to 2022. Of the total, he estimates that 32,500 new rental units are required in this period.


Aspirational Plan-led or Pragmatic Market-Led Strategy?

The targets in the NPF implied considerable new housing development in Dublin and are quite ambitious in terms of the number of units to be built within the existing footprint, unless a very different type of housing is foreseen.

However, this other research suggests that the actual requirements of Dublin will be a multiple of what is foreseen in the NPF.  The differences are particularly noticeable over the next few years but remain for the full period up to 2040.

The key issue is that the NPF seeks to achieve a more even distribution of the population within its timeframe. The danger is that it may attempt to achieve this through limiting the growth of the housing stock in the city while possibly building houses in other areas where there is no effective demand.

If these houses are in areas within driving distance of Dublin the outcome will be ongoing growth in commuting. If they are further afield then prices will rise even faster in Dublin while the market stagnates elsewhere.

Dublin's Housing Needs

These are dynamic effects that would enhance rather than reduce the regional disparities that the NDP is supposed to address. Furthermore, there is no counteracting equilibrating mechanism, except in the very long term.

The fact is that development must be demand-led if the correct types of housing in sufficient numbers and in the correct locations that will achieve a balance in the housing market are to be provided. Regional disparities in demand must be lessened by addressing the underlying factors, not be attacking the outcome.

The NPF does not place sufficient emphasis on this requirement and, while acknowledging that development should proceed in a planned manner, the Plan cannot attempt to undermine the need for output to be demand led by aiming at supply-led development.


An Unresolved Tension

This tension is not new, but it is brought much more clearly into focus in the NPF by the emphasis on housing and by the existing crisis.

The National Development Plans of the 1990s and earlier came up against a similar problem when aiming at regional development that adopted a notion of regional equality.

Should industry and infrastructure be located in under-developed regions i.e. away from Dublin, to bring them into line with the capital, or should the resources be put into the Dublin region where the demands were greatest and where there were the best chances of developing a competitive economy?

This tension appeared to be addressed in the concepts that moulded the National Spatial Strategy (NSS) when it was being developed almost two decades ago.

This was achieved by reformulating the question to identify the potential of each region and then asking how policy might best help each region to reach its potential. It is important to note that this is an acceptance of regional inequality – the opposite of earlier thinking.

As we now know, the NSS was never properly implemented. This was partly because it was not possible to do so, but political realities had a big part to play. After all, the acceptance by a region that its role is subsidiary was never going to be easy.

What is worrying is that the NPF, instead of overcoming these difficulties appears to have reverted to the earlier conceptual parametres.

This is most clearly illustrated with regard to the housing plans. While not aiming at exact equality in an arithmetic sense, the targets are clearly set as representing a more even distribution of population than would be the case in the absence of planning.

However, in setting these targets, the NPF projections appear far from what housing demand would imply.

This approach did not work in the past and there is no reason to suppose it will work now.

While there are risks with both, the potential costs of emphasising and following this plan-led, supply-driven approach, rather than allowing the alternative market-led, demand-driven approach are very great indeed.

This is not recognised in the NPF. As a result, there is no contingency included.



Downey Planning (2017) Housing Solutions to Assist Ireland in Realising its Potential: An Irish Housing Research Report. Report to Hooke & MacDonald.

Government of Ireland (2018) Project Ireland 2040: National Planning Framework

Housing Agency (2017) National Statement of Housing Supply and Demand

Lyons, R. (2017) Growing Great Teams in Ireland: The Role of the Residential Rental Sector. Report to American Chamber of Commerce Ireland