Housing remains 'largest stumbling block' in Mid-West as full employment exacerbates demand
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As Ireland's Mid-West inches closer to full employment, housing remains "one of the largest stumbling blocks," in the region, with a sharp decrease in planning permissions granted in Tipperary and increasingly low rates of homes for sale in Limerick and Clare going to owner-occupiers.
With just 4.4% of the region out of work, businesses are increasingly hiring from international talent pools. This is according to a new economic report by Limerick Chamber, which has reported an 82% rise in the number of work permits issued last year.
With more workers operating from the Mid-West region, this has further exacerbated the need for housing, with just 787 homes completed in Limerick last year, compared to an estimated need of 2,400.
Severe supply shortages have also pushed prices up sharply, with residential property growing by 6.7% year-on-year across the Mid-West. Average house prices across Limerick now exceed €300,000, reflecting an increase of more than 23% annually.
Also causing concern is the proportion of homes being sold to owner-occupiers, with an increasing number of properties being immediately transferred to the rental market or short-term lets.
Across Limerick, just 43% of homes sold last year went to occupiers, a figure described as "very worrying," by Limerick Chamber chief economist, Seán Golden. Similarly, in Clare, just 57% of all homes sold last year went to owner-occupiers.
In 2022, the number of homes commenced across the Mid-West increased by just 9 homes compared to 2021 - largely driven by a decrease in the number of homes commenced in Clare and Tipperary.
Nationally, the number of homes commenced in 2022 decreased by almost 4,000 compared to the previous year, representing a decrease of 12.3%
In the rental market, average prices have risen by 37.5% in Limerick city since the pandemic, representing an additional annual spend of €5,472 for new tenants. In addition, annual rental prices rose by 17.2% across all of Limerick, increasing by 16.8% in Tipperary and 9.6% in Clare.
Despite continued shortages across the residential market, vacancy across Limerick commercial properties has risen to just under 17%. In Shannon, it has risen to just under 30%, with rising vacancies representing "significant issues" across Clare, according to the report.
In Limerick, growing vacancy rates were said to "negatively affect other business confidence and vibrancy, as well as the attractiveness of the city centre."
Despite growing housing shortages and their negative impact on regional businesses, the report credited the Mid-West for its steady supply of graduates, with just under 25,000 enrollments in third-level institutions.
The region's ports and airports were also credited, with passenger numbers at Shannon airport up 21% on pre-covid levels. Similarly, Shannon Foynes Port was reported to have handled 8.4m tonnes of cargo, carrying more than any other Irish port.
"The Mid-West remains a great place to do business, however, housing is posing a serious risk to businesses, both existing and future," the report states.
"While there are some positive indications in commencements and delivery, they severely lag behind what is actually needed."