THE Mid-West region, comprising Limerick, Clare and Tipperary, needs to build 49,000 homes over the next 15 years, or more than 3,200 per annum, if housing demand is to be met, according to an analysis undertaken by Sherry FitzGerald.
Demographic trends are the main driver of this demand with the country’s population expected to increase from 4.8 million in 2016 to 5.8 million by 2036. In the Mid-West, the population is expected to grow by nearly 80,000, increasing from 473,000 in 2016 to 553,00 by 2036.
Last year, despite the impact of Covid-19 on the construction sector, 1,200 dwellings completed construction. While representing a slight decrease of 4% year-on-year, it still leaves a significant gap between actual demand and completed units with a shortfall of 1,400 units, against an estimated 2,600 units needed each year in the Mid-West between 2022 and 2026.
This is leading to increased demand, which along with the ongoing supply constraints in the housing market, continues to fuel the recent heightened levels of house price inflation.
According to the Sherry FitzGerald House Price Barometer, average second-hand values in the Mid-West increased by 3.0% in the second quarter and have grown 6.5% in total since the start of 2021. Annually to the end of June, prices have increased by 9.1% in the region.
Nationally, second-hand values rose 3% in quarter two, 4.6% in the year-to-date and 5.8% over the past twelve months.
Ailbhe O’Malley, director of Sherry FitzGerald Limerick said: "Demand has been incredibly strong recently driven by buyers returning to the region from Dublin and further afield. This has only amplified the supply and demand imbalance that existed prior to COVID-19.
"This heightened demand coupled with expansions by local employers is underpinning the current upward pressure on prices and further highlights the need for new housing."
The strong momentum in sales activity noted at the end of 2020 continued into 2021. Approximately 1,100 home sales were recorded on the Property Price Register (PPR), excluding block sales and new homes acquired for social housing, in the Mid-West. An increase of 4% on the corresponding quarter in 2020.
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