Any review of prospects for the Irish economy and its consumers should take into account the country's housing market. In its March 2, 2006 sketch of Ireland's economy, the Organization for Economic Cooperation and Development (OECD) said in classic understatement, "The Irish housing market is very buoyant."
Statistics provided by Ireland's Central Statistics Office (CSO) in June 2007 show that 88,211 private housing units were built in Ireland in 2006. When what the CSO calls "Social Housing" is added in (5,208 units), the total number of units built in 2006 comes to 93,419. The graph above uses the private housing number because it was reasoned this might provide a clearer picture of the market forces at work. In truth, the two charts would be nearly identical.
A July 12, 2007 story in The Irish Times (Dublin), citing The Central Bank and Financial Services Authority of Ireland (The Central Bank) as its source, said that 80,000 houses were forecast to be built in 2007, and that the estimate of new houses for 2008 was 77,500. The Times added, "In the long term, the economy only needs 60,000 new houses each year."
New housing is an important driver of consumer spending because in addition to spending on the unit itself, other durables and consumables are required to establish the new household.
Ireland's consumers are in an enviable position to afford new housing and all that goes with it because, according to April 2007 International Monetary Fund (IMF) estimates, Ireland is a distant second in per capita income in the world (us$49,939) after Luxembourg (us$88,529) and just ahead of nearly identical Norway (us$47,270) and the United States (US) (us$47,050.)
The previously cited OECD report credits Ireland's highly favorable economic status as resulting from, among other things, "A steep rise in the educational...