An assessment released this week by the Department of Finance shows increasing concerns for Ireland’s future economy and society, with an emphasis on the housing market.

Minister for Finance, Paschal Donohue, launched “Future Forty: A Fiscal and Economic Outlook to 2065”, which models over 2,000 scenarios for Ireland’s future over the next forty years. The models are based on national and international trends.

‘Future Forty’ includes a fiscal analysis of how the age demographic will impact Ireland over the next four decades. The assessment shows that the old age dependency ratio has increased, and fertility rates have declined over the past 38 years. The assessment states, “A rising old-age dependency ratio increases pressure on public finances, by raising costs for age-related expenditure. Over the long term, a smaller workforce relative to the total population will pose fiscal challenges and potentially constrain economic growth.”

Demographic trends show that migration will have both positive and negative impacts on the issue. Inward migration can help to alleviate the challenges of our ageing population by filling skill gaps and reducing labour shortages. However, an influx of migrants will pose challenges to the government through the increased demand for infrastructure and public services. ‘Future Forty’ states that this may cause delays in family formation which, in turn, lower birth rates.

Source: assets.gov.ie

The above graph shows population projections from 1996-2022 and includes estimates up to 2057. 

The assessment includes a report on housing, which states that it is expected that demand for housing will peak in the early 2030s and will not ease until the 2040s.

Rachel Dunne, a 32-year-old special needs assistant told The City, “I’d be more inclined to emigrate than to wait another 20 years until I can purchase my own home.” Ms. Dunne and her partner have been renting in Dublin for the past 6 years. “We’re lucky to be in the position to afford rent in Dublin, but I just want to paint my own walls without having to ask someone,” she said.

Depending on immigration and fertility rates, it is projected that the population will reach between 5.9M and 7.9M by 2065. Notably, the report states that the current government plans to build 300,000 more houses by 2030.

The main scenario in the ‘Future Forty’ document is referred to as the ‘Central Scenario’. The ‘Central Scenario’ is a model that anticipates a change in household size preference due to changes in demographics over the coming years. Suppliers are predicted to shift from providing family-friendly housing units to units more suitable for single occupants. 

Source: assets.gov.ie

The above graph is a representation of projected future housing expenditure and its relative GNI. The ‘Central Scenario’ takes social housing, HAP, and RAS into consideration.

Housing expectations in this scenario are entirely dependent on the 2030 supply target being met.