The VIs always point to the ‘fundementals’ as the reason why we will be the shinning example of the first property bubble not to burst or deflate.
We have a young population,
Yes but the average age of a FTB is 32 recently saw on this site we have 690k aged 22-32 ie for the next ten years thats a supply of 69k PA FTBs (FTBs outside this age group will be balanced by those in it not buying longterm) this is key because 69k even if we have an ocupency rate of 1.5 per home (half FTBs are couples half are just one person) then they will buy 46k homes or rent them.
This is extra people coming into the country our growth rate including births and deaths which gives a true picture is 2.5% huge by western standards gives us 107,500 more people to house each year. At the CSO ocupency rate 2.8 per hosehold we would need to add 38,400 new homes PA. (the CSO stat of 2.8 dosen’t include unoccupied homes as they are not hoseholds)
Less homes here than the EU average
The construction industry say we will move towards the EU average of 474 homes per 1000 of population. Maybe but EU average of under 15s 16% Ireland 20.6% of population ie we are likly to stay above that average for some time to come and even using that average the 107500 extra population PA would require 51k homes this would be 2.1 persons per home.
Taking these as principle ‘fundementals’ (If I missed any pleases tell me) I can only conclude that we need to add not more than 40k-55k homes PA which is huge number for country of our population.
The supply of people is the driver the NEED for housing and it is this need that the ultimate longer term demand. Short demand is influenced by speculation but ultimately you must have a market for your stock of houses if the market is not to crash and this is where the 250k empty homes comes in there has been an oversupply of about 30k homes PA and while buyers can hold off worried about the market the supply which has a long lead in time keeps adding to the exsisting oversupply. How many news stories do you here about people in this country cramed into homes because of lack of supply to either buy or rent? None, there is no shortage for all these empty homes built in the last few years there is people in need of their use therefor they have no market. That is what the VIs either forget or fail to bring to there radio interveiws.
When house prices do not obey the fundamentals it’s blamed on the weather. Last summers down turn was blamed (by Sherry Fitz) on the hot summer. US spring selling season was also blamed on cold weather
So another fundamental is the ambient air must be room temp.
That’s the case for the prosecution in a nutshell, in terms of raw demand. The projections for population growth are heavily dependent on continuing levels of inward migration, which are predicated on further unsustainable levels of private sector credit growth, and house building. In short it was a bubble.