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Central Bank identifies immigration as key driver in housing market

As noted previously, the official and opposition targets for new housing builds, even if met, will be inadequate to cater for the increasingly migrant driven growth in population that is set to continue and increase over the foreseeable future.

The population of the Irish state is officially forecast to increase by one million between the baseline of the 2017 National Development Plan as expanded into the “vision” of Project 2040. In fact that is at the lower end of projections from the Central Statistics Office based on a low immigration and low fertility model.

If migration continues to increase, as it clearly was and is even apart from the decision to accept potentially several hundred thousand people from Ukraine, then the population of the Republic could reach 6.69 million by 2051 – an increase of around two million.

An analysis of the projections made by the ESRI would suggest that even a growth of one million would have to be made up of 60% new immigrants. Indeed, Minister for Foreign Affairs Simon Coveney, who was Tánaiste at the time the previous Government was celebrating the Great Project, stated openly that this would be the case.

That percentage of migrants would obviously increase given the currently low natural replacement rate due to falling birth rates among Irish people. That would mean that the proportion of the population born outside of the country would come to exceed 25% over the next 30 years.

Some people think that this would be a great idea for various reasons. People like Aidan Cummins of the Restaurant Association – and he is no doubt channelling the opinions of many people in the lower wage sectors – support this because it will reduce their operating costs. Simple as that.

Others have even more spurious reasons based on what is basically a belief that the fewer Irish people there are as a % of the population, then the better the country will be. It is difficult to imagine any other European country where such an ideology of contempt for the natives and their culture is so dominant across the public sphere.

Indeed, the very same people would be appalled if anyone were to suggest that Kenya or Tunisia or Pakistan would be a better place if 25% of the population came to be comprised of immigrants with no organic connections to the host society. It used to be called colonialism when it involved much smaller numbers of settlers from France or Britain when those states were the dominant political force.

All that aside, there are the practical aspects. Chiefly, where are all of the extra million or two million people to live? The initial NDP target for annual new builds in 2017 was 25,000. The ESRI report on Regional Demographics and Structural Housing Demand at County Level published in December 2020 stated that the target would need to be between 28,000 and 33,000 new builds each year, even on their more modest migration scenarios.

According to the Central Statistics Office there were 20,433 new dwellings completed in 2021.

Let’s be honest then and face the fact that there is little chance that the expected demand for new housing is going to be met. Given the current shape and direction of the housing market, it is also likely that the greater part of what new accommodation does come on stream will be both multi story one and two bedroom apartments, and mostly built-to-rents.

It is rare that any official or allegedly “non governmental” voice whispers about the elephant in the corner at the centre of the housing crisis. The Central Bank is an exception and it has several times referred to immigration as one of the key drivers of the housing market. Indeed, just this week in a webinar on mortgages, the bank referred to both immigration in general and the current influx of Ukrainian refuges as one of the factors pushing up house prices.

That might appear obvious but you never hear any serious discussion of inward migration in this context from those who support both even greater immigration for work and asylum; and simultaneously propose that the existing and future demand for housing can be met. Usually through socialism of some variety, which of course never worked anywhere else but that’s neither here nor there.

The state appears to have had no problem using its power to ensure that Ukrainian refugees are housed. Which has inspired some on the left to advocate that this be applied generally. Rather than of course to question whether it might be better addressing the source of the problem. Including suggesting how to solve the conundrum that is building enough houses to meet current demand while at the same time planning to vastly inflate that demand.

Thus, Rory Hearne of Maynooth University can succinctly identify the consequences which all of the multiple factors that influence the housing market mean for people trying to find somewhere affordable to live; and at the same time take it for granted that some unquantifiable number of people from outside of Ireland can be fitted seamlessly into the “solution.”

Which of course is the state seizing private property, establishing its own construction agency, freezing rents and so on and so forth. None of which have ever succeeded in providing most people with adequate housing where the state has assumed such a dominant role. The evidence of that is found right across the former European and Soviet socialist cities and towns. And that was in countries where no one was allowed to leave or come to live in.

One of the models that does work is that which is in place in South Korea, and indeed the type of housing strategy that was pursued by Fianna Fáil here in its prelapsarian period where the state through financial policy and local authorities attempted to ensure that working families are able not only to find a box 30 stories up in the sky – as was the pattern under socialist states and socialist local administrations in Britain and elsewhere – but decent affordable homes that are part of a stable community.

None of those things come about where either the market is allowed full rein, nor where the state controls everything and where collectivist ideology underpins strategy. Especially when both take or granted that the existing communities under assault from the variants of the forces of international capital and mass migration are pretty much surplus to requirements.

At least the gombeen element do not pretend that it is going to make everything better for anyone other than themselves.

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