Crowded Housing: Ireland’s household size lags European norm

As per the 2022 Census data released today, there has been a considerable shift towards shared accommodation, with an additional 52,328 households living in some form of shared housing. This represents a staggering 32% increase since 2016, and this shift has directly influenced the average household size, effectively holding it steady since 2016. The lack of new housing on the market has been instrumental in causing this shift, underlining the pressing need for new residential development.

According to Savills calculations, 453,000 new homes would need to be delivered to bring Ireland in line with the European average and alleviate crowded households.

Savills Director of Research, John Ring, says: “The stagnation of household sizes reflects the sustained pressure in the housing system as completions continue to undershoot demand. The numbers also lay bare the consequences of sustained under delivery of housing, with people being forced to squeeze in and share housing with other groups.”

While the number of households increased by 8.2% between 2016 and 2022, the number of couples with children households increased by 3.6% while single-parent households increased by 2.5%. The low levels of household formation in for these groups were reflected in increases in these groups sharing with couples with children sharing (+25%) and single parents sharing (+32%). This effect was not just restricted to people with children, with the number of people with no family members rising by 43%.

A closer look at the figures shows the number of households renting privately increased by 6.7% nationally while the overall housing stock increased by 8.2%.

Ring says: “The narrative that we are building too much private rented stock at the expense of other forms of housing does not stand up to scrutiny. We know anecdotally that we have a particular shortage of one and two bed-room sized units – unit sizes that are typically delivered for the private rented sector - and the Census data backs up this assertion.”

The trend in housing provision is significant for the future and comes against a wider shift in Ireland’s demographics. As the population continues to age, the Government will be further divided on the best way to allocate budgets to balance the needs of younger people and housing demand against social spending on health and pensions.

The number of people aged 65 and over increased by 22%, or 138,748 persons, between Census 2016 and 2022. At the same time, the population aged 15 and under increased by only 5%, or 74,054 persons. This highlights the oncoming demographic timebomb whereby the ratio of young to older persons is set to shrink, placing significant pressure on social spending because a smaller proportion of the population will be of working age. This will squeeze income tax receipts at precisely the time when there will be greater demand for social spending on health and pensions, potentially drawing much-needed resources away from housing provision.

Ring concludes: “This will necessitate a prudent budgetary and policy approach and the Government will have to tread carefully. In the meantime, the Government would do well to focus its efforts on alleviating pressure in the housing market while it still has the flexibility to invest in this area of spending.”