Ireland's Housing Affordability Challenge: From Dublin to the Countryside

Recent studies by the Economic and Social Research Institute (ESRI) highlight persistent structural challenges in housing affordability, particularly for private renters, low to middle-income households, and those in urban areas. The Central Statistics Office (CSO) reports a significant increase in population due to high levels of immigration, which has further strained the housing market.

Here are six key findings from recent studies by the Economic and Social Research Institute (ESRI) and the Central Statistics Office (CSO) regarding housing affordability and immigration in Ireland:

1. Persistent Structural Challenges: The ESRI highlights ongoing structural challenges in housing affordability, particularly affecting private renters, low to middle-income households, and those living in urban areas.
2. Population Increase Due to Immigration: The CSO reports a significant population increase, with Ireland’s population rising by 98,700 people in the year to April 2024. This surge is largely attributed to high levels of immigration, including 149,200 immigrants entering the country.
3. High Cost of Living in Dublin: Dublin, being the capital and the most populous city, has seen a substantial outflow of residents seeking more affordable living conditions. The high cost of living and housing in Dublin has driven many to relocate to other parts of the country where housing is more affordable.
4. Affordability Disparities Between Urban and Rural Areas: The ESRI’s analysis shows that first-time buyers in the Greater Dublin Area spend more than 30% of their income on mortgages, compared to less than 20% in some rural counties. This disparity highlights the affordability challenges faced by urban dwellers and the relative ease of homeownership in rural areas.
5. Rent vs. Homeownership: The decision to rent or own a home is influenced by various factors, including income, employment stability, and personal preferences. Homeowners in Ireland typically spend a smaller portion of their income on housing compared to renters. However, the initial barrier to homeownership, such as saving for a deposit, remains a significant challenge for many, particularly in high-cost areas like Dublin.
6. County-Level Affordability Variations: A county-level analysis reveals significant disparities in housing affordability across Ireland. In Dublin, Wicklow, Kildare, and Meath, first-time buyers spend more than 30% of their income on mortgages. In contrast, counties like Longford, Leitrim, and Roscommon have much lower housing costs, with first-time buyers spending less than 20% of their income on mortgages.

These findings underscore the complex interplay between migration patterns and housing affordability in Ireland, highlighting the need for targeted policies to address these challenges.