According to Census 2016, the population of the State increased by 3.7% during the last five years and now stands at approximately 4,750,000. More significantly, the population of Dublin increased considerably to approximately 1,345,000, an increase of 5.7%.
According to Knight Frank, the results will have profound implications for the housing market as the demand for housing in Dublin is likely to be a lot stronger than previously thought. The extraordinary rate of population growth in Dublin has outperformed many forecasts, in particular the CSO’s Regional Population Projections, upon which many demand forecasts for the housing market are based. As a result Knight Frank has updated its housing demand forecasts to reflect this new reality. According to the updated analysis, during the period 2016-2020, Dublin will now require approximately over 4,000 units than had been envisaged under the previous highest forecast with approximately 11,000 new units required each year. This adds to the 25,063 houses needed right away to relieve the pent-up demand which has built-up due to the combination of high population growth and low new housing delivery. Worryingly, Knight Frank forecast that less than 5,000 units will be built in Dublin in 2016 meaning that the housing shortage problem will continue to grow.
As a result it will necessitate the construction of an even greater number of homes than previously anticipated and should be considered carefully by government, particularly in light of the fact that government is planning on launching its Housing Action Plan in the coming week which will establish a number of targets for the housing market for the coming years.
The results show that a significant driver of Dublin’s future population growth will be net migration. According to Census 2016, the average annual net migration rate into Dublin was 1.2 per 1000 of the population. Aside from the South West, which had an average annual net migration of 0.1 per 1000 of the population, net migration into Ireland’s other regions was negative; indicating a trend towards greater urbanisation. This is in line with a number of forecasts. For Ireland, the UN projects a trend towards even greater urbanisation than the norm with 80% projected to live in urban areas by 2050, up from just over 60% currently. With urbanisation becoming an increasingly global phenomenon, increasing movements into Dublin will determine the city’s ability to compete with other global cities such as London and New York.
Census 2016 also provides a number of other important insights into the residential property market. According to the results, 18,891 units were added to the Housing Stock during the period 2011 to 2016, an increase of 0.9%. In Dublin, 5293 homes were added to the housing stock bringing the total housing stock to 534,652, an increase of almost 1%. The marginal increase in the housing stock underscores the lack of construction activity in Dublin at the moment. The vacancy rate has declined from 8.3% in 2011 to 6.9% in 2016.