The IFAC report points out that Ireland’s infrastructure is 25% lower per person compared to the average for high-income European countries. This gap has narrowed since 1995 but remains substantial. The report identifies the planning system’s “slow and unpredictable nature” as a significant barrier, increasing costs and delaying project delivery. The planning and objection system is holding back tens of thousands of homes, and the effectiveness of the Government’s recent planning legislation, designed to overhaul the system, remains to be seen.

Housing is a critical area of concern. The report states that to meet the current demand, Ireland needs to significantly increase its housing output. Current targets set by the Government’s Housing for All programme are based on outdated data and need to be revised upwards to reflect the growing population. The IFAC suggests that improving productivity in the construction sector could reduce the number of additional workers needed from 80,000 to less than 20,000. The Fiscal Council estimated that 68,500 homes need to be built annually to catch up and meet the growing population, which is more than double last year’s housing output.

One of the key issues highlighted is the low productivity in the construction sector, which is about 32% lower than the international average. The report suggests that adopting modern construction methods, such as offsite construction and factory assembly, could significantly improve efficiency and reduce costs by 20-40%. Larger firms, which are typically more productive, are better positioned to invest in these technologies. The National Infrastructure Summit, held annually, provides a platform for stakeholders to discuss these challenges and explore innovative solutions.

The report emphasises the need for sustained public investment and better value for money. Ireland already spends a high amount on public investment relative to the size of its economy, but the challenge lies in maintaining this level of spending and improving its efficiency. The new Planning and Development Act is expected to help streamline the planning process, although its effectiveness remains to be seen. The Fiscal Council warned that an additional burst of spending could add to inflation and advocated for increasing taxes or reallocating spending from elsewhere.

The infrastructure deficits are not limited to housing. Significant shortfalls exist in healthcare, transport, and electricity, all of which require urgent attention. Addressing these deficits will require a multi-year, planned approach, with a focus on improving productivity and reallocating existing resources. The population is expected to grow by 10% over the next decade, further straining existing resources. Additionally, the ageing population will increase the demand for healthcare services, necessitating more investment in health infrastructure. The number of people aged 65 or over is expected to more than double in the next 30 years.

The need for additional workers is driven by Ireland’s rapidly growing population and the associated demand for infrastructure. The population growth, coupled with an ageing demographic, will place increased pressure on existing infrastructure. The IFAC report suggests that if health capital investment grew by 5% every year from its current high level, Ireland would reach average European infrastructure levels by 2033.

As Ireland transitions to a low-carbon economy, there is also a pressing need to invest in sustainable infrastructure. This includes upgrading the electricity grid to accommodate renewable energy sources and improving public transport to reduce carbon emissions. The National Infrastructure Summit provides a platform for stakeholders to discuss these challenges and explore innovative solutions. Topics at the summit include understanding Ireland’s population trends, policy and regulatory updates, and leveraging innovation to build future-proof infrastructure.

The median asking price for a home in Ireland now stands at €365,000, reflecting a 0.8% increase from the previous quarter. The rise in prices is more pronounced outside the capital, where prices have surged by 8.5% over the year, bringing the median asking price to €315,000. In Dublin, the annual increase was 6.2%, with the median price reaching €455,000.

Several factors contribute to this upward trend. One significant driver is the limited supply of homes. As of September, there were 13,100 homes listed on MyHome.ie, a figure significantly lower than pre-pandemic levels. This shortage is exacerbated by the reluctance of potential sellers who fear they might not secure a new property after selling their current one.

Economic factors also play a role. The relaxation of Central Bank mortgage lending rules for first-time buyers has increased the share of first-time buyers with higher loan-to-income ratios. Additionally, average earnings have risen, which has helped drive up mortgage approval values.

In Waterford, house prices have seen a substantial increase. In Waterford City, prices in the third quarter of 2024 were 3% higher than a year previously, with the average price of a home now at €250,000. In the rest of Waterford, prices rose by 8% over the same period, with the average price reaching €348,000.

The overall housing market in Ireland remains under pressure due to the country’s population growth, which has been 1.9% for the second consecutive year. To match the UK’s housing-to-population ratio, Ireland would need to build an additional 206,000 homes.

Despite the challenges, there are some positive signs. New housing starts have risen to 49,000 in the year to July, and MyHome.ie expects completions to increase sharply next year to above 40,000 units. However, the impact of build cost inflation and elevated energy costs remains a concern.

In addition to these factors, the report highlights that one in seven properties are now selling for 20% over the asking price, indicating a highly competitive market. This trend is particularly evident in Dublin, where the demand for housing continues to outstrip supply.

The report also notes that the average time to sale agreed was just 12 weeks in the third quarter, close to a historic low. This rapid turnover is a clear sign of the high demand and limited supply in the market.

Conall MacCoille, Chief Economist at Bank of Ireland, commented on the situation, stating that the rising population and economic growth are reminiscent of the Celtic Tiger era. He emphasised the need for a significant increase in housing supply to meet the growing demand.

Joanne Geary, Managing Director of MyHome.ie, expressed optimism about the future, noting that the increase in housing starts and expected completions are positive signs. However, she also stressed the importance of sustained efforts to address the imbalance in the market.

The Irish housing market is experiencing significant price increases driven by limited supply, economic factors, and population growth. While there are efforts to increase housing supply, the market remains tight, and prices are expected to continue rising in the near term.

The influx of immigrants has contributed to a notable increase in Ireland’s population, which now stands at approximately 5.38 million, the highest since 2008. This growth is largely driven by immigration from outside the European Union, particularly from Ukraine. The CSO reports that 86,800 of the new immigrants were from non-EU countries, with a significant portion being Ukrainian refugees.

Among the immigrants, 30,000 were returning Irish citizens, 27,000 were other EU citizens, and 5,400 were UK citizens. The remaining 86,800 were from other countries, including a significant number from Ukraine, reflecting the ongoing conflict and humanitarian crisis there.

In addition to the high levels of immigration, Ireland has also seen a rise in emigration. Over the same period, 69,900 people left the country, the highest emigration figure since 2015. This includes a substantial number of Irish citizens moving to Australia and the UK. Specifically, 10,600 people emigrated to Australia, up from 4,700 the previous year, and 15,200 moved to the UK, up from 14,600 in 2023.

Despite the increase in emigration, the net migration figure remains positive, with 79,300 more people arriving than leaving. This positive net migration, combined with a natural increase of 19,400 people (resulting from 54,200 births and 34,800 deaths), has led to the overall population growth.

The demographic changes have also highlighted shifts in the age structure of the population. The number of people aged 65 and over has increased, now representing 15.5% of the total population, up from 13.8% in 2018. This aging population presents both challenges and opportunities for Ireland’s social and economic systems.

The Irish government has acknowledged the challenges and opportunities presented by these demographic shifts. Former Taoiseach Leo Varadkar previously emphasized the need to manage the flow of Ukrainian refugees into the country, and recent policy changes have included reductions in social welfare payments for Ukrainian refugees living in state-provided accommodation.