Lower income families are “locked out of housing” as households on the average national income could have bought less than 5% of new homes built, a study has said.
The report stated that this applies particularly to households on the current average income of 65,000 euro in the greater Dublin area.
The research, carried out by property finance company Initiative Ireland, also found that there was an 18% increase in new housing in Ireland last year, which is a fourth consecutive year of growth.
However, despite the increase, there was a 48% shortfall in supply overall.
Housing 2020 also indicates that Covid-19 is expected to have an impact upon up to 20% of housing in Ireland, meaning supply is unlikely to increase this year, instead remaining at 20,000 units.
According to the analysis, new house prices were 30% higher than second-hand homes in 2019 on average, demonstrating the emergence of two distinct markets.
The report said that while Ireland’s GDP has increased 50% over the last five years, rental pressure has resulted in a 300% increase in people living in emergency accommodation.
Padraig W Rushe, CEO, Initiative Ireland, said: “The data in Housing 2020 demonstrates strong improvements to housing supply but there is a shortfall overall, and a continued under-supply of affordable housing which continues to impact low to middle income families the hardest.
The data in Housing 2020 demonstrates strong improvements to housing supply but there is a shortfall overall, and a continued under-supply of affordable housing which continues to impact low to middle income families the hardestPadraig W Rushe, Initiative Ireland
“Covid-19 has and will impact supply this and next year.
“At a time when most of us are confined to our homes, it is important to remember that there are over 10,000 Irish families still living in emergency accommodation nationwide.
“While the short-term restrictions introduced by Government were appropriate and prudent, it is promising to now see some social housing developments reactivating, albeit subject to essential social distancing and enhanced health and safety measures.
“With a near 50% shortfall in housing supply last year and facing a similar shortfall next year, we need to maintain a balanced approach without compromising the health and safety of workers and that seems to be the approach now coming into effect.
“Developers and finance providers have a role to play, to promote safe work practices that factor in Covid-19 restrictions.”
Sinead Byrne, chief operating officer at Initiative Ireland said: “As an impact finance specialist, we have always been committed to delivering societal and environmental impact by funding smaller scale social and affordable, energy-efficient housing developments nationwide. We do this for the impact.
“The smaller scale of these developments however does mean they are delivered by smaller teams, working often in more remote locations.
“In light of Covid-19, this model can help to reduce the immediate health risks for the men and women who are actively working on these developments up and down the country, as well as supporting jobs nationwide.
“As an investment opportunity, all loans are secured with a first legal charge over the properties and these loans show no correlation with the markets, making for a lower volatility, asset-backed opportunity.”