Drastic Fall In Young Homeownership Rates Leaves Future Retirees Financially Vulnerable, According To ESRI

The report warns pensioners in years to come will be have to pay high rents while no longer working.

Home ownership rates among young working adults in Ireland have collapsed in the face of rising house prices, according to a new report

It warns that a greater proportion of future retirees are likely to be financially exposed when they stop working as they will have to pay rent.

The research by the Economic and Social Research Institute (ESRI) found that the share of 25-34 year olds who own their own home more than halved between 2004 and 2019, falling from 60% to just 27%.

Lower home ownership rates would mean a higher proportion of households in the rental sector and “the continuation of rental payments into retirement," the report found.

The drop in home ownership of this level would also raise the proportion of older people (aged 65-plus) living in income poverty, from 14% at present to as high as 31%.

The study said that while further income-based supports or direct housing cost interventions for future groups of retirees most at risk of income poverty could be considered by government, it would place a significant cost burden on the exchequer given the scale of the projected fall in home ownership.

The ESRI report found policy interventions at earlier stages of the lifecycle were critical to help lower the costs of housing that future cohorts would face in retirement.

The failure to resolve the housing crisis will have catastrophic consequences for entire generations of young people, according to Social Democrats Housing Spokesperson Cian O’Callaghan.

He said Ireland’s housing crisis is creating a poverty time bomb due to the soaring numbers of people who will be forced to continue to pay rent long after they retire.
Deputy O’Callaghan commented:“Historically low levels of homeownership are creating a poverty time bomb due the soaring numbers of people who will be forced to continue to pay rent long after they retire. The ESRI has estimated that the proportion of older people living in poverty will reach a staggering 31pc.

“This is a nightmare scenario – which will inevitably become a grim reality unless the government takes serious action to tackle the housing crisis. Regretfully, there is no indication that it is doing so.

“This government, and successive previous Fine Gael-led governments, have continually promised to boost home ownership rates. Instead, under their watch, the situation is getting progressively worse.

“This failure to resolve the housing crisis will have catastrophic consequences for entire generations of young people, who are now looking towards an uncertain and insecure future of housing insecurity and poverty," he added.