The housing market is not ready for the mass retirement era

The Bank of Ireland has highlighted US- and British-style purpose-built retirement homes as a potential lesson for Ireland as the population ages and housing pressures mount.

Speaking at an industry event in Dublin, Bank of Ireland Corporate Banking Senior Director Michael Murray said the development of more specialized accommodation such as retirement homes has not really taken root in Ireland, but “the UK and US experience could provide useful lessons for us”.

The bank currently has 1.3 billion euros in financing for the construction sector, which will finance the construction of over 19,000 new homes in the coming years, making it a significant player.

The ‘Building Our Future’ housing event, held Thursday at the Bank of Ireland in the former House of Lords on Dublin’s College Green, included a discussion of demographics, tenure and planning.

Participants were told that Ireland’s housing model is not prepared for a projected shift in population balance, which will see the number of pensioners as a fraction of the labor force rise to 47 per cent from around 24 per cent currently.

At the same time, the proportion of 25 to 34-year-olds who live independently and own their own home more than halved between 2004 and 2019, falling from 60 to just 27 percent.

This will potentially mean that a large proportion of future retirees will be homeless, a radical departure from the current scenario.

David Duffy, director of property industry Ireland, said an older population will mean smaller average households and different housing needs.

“Population growth scenarios also provide insights into the future shape of the housing market – who lives where and in what type of housing – so an update to take into account the 2022 census should be made as soon as possible,” he said.

‘Downsizing’ by older people as their families grow up and move out is rare in Ireland, a potential barrier to the adaptation of family housing supply to families.

According to John McCartney, Adjunct Associate Professor at the UCD School of Architecture, Planning and Environmental Policy and Director of Research at BNP Paribas Ireland, policymakers should consider factors that can lock people into unsuitable housing, such as transaction costs and other barriers to movement.

“Household needs evolve throughout their lives and this can potentially lead to a mismatch between their housing needs and housing conditionss they are experiencing at any given time. A key policy challenge then is to create flexibility,” he said.

https://www.independent.ie/business/personal-finance/property-mortgages/housing-market-not-ready-for-era-of-mass-retirement-42156172.html The housing market is not ready for the mass retirement era

Fry Electronics Team

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