My Department estimates that the medium-term demand for housing is around 35,000 units per annum. Over the period 2008 - 2018, an average of less than 15,000 units were built each year, resulting in a considerable level of ‘pent-up’ demand. In order to satisfy this pent-up demand, housing output will need to be higher than the level of annual underlying demand for a number of years.
The risk of overshooting housing supply identified in the Stability Programme Update (SPU) is a more medium-term to long-term risk. It relates to the possibility that housing output would remain at elevated levels for a period after all unmet demand has been satisfied. The Deputy will be aware of the over-reliance on the construction sector in the first decade of this century, and the disastrous consequences of this.
Finally, I would stress that the SPU highlights - as a more immediate risk - the potential for supply constraints to arise in meeting this level of supply and the impact that may have on competitiveness.