A rapid increase in Dublin's population has profound implications for the city's housing shortage, according to Savills Ireland.

Until recently official statistics indicated that Dublin was edging up by less than one percent a year. However, new CSO data shows that population growth is running two and a half times faster than previously thought, with 32,000 extra people now living in the city compared with 2014.

Dr John McCartney, Director of Research at Savills, commented: "The rapid surge in Dublin's population has not received the attention it deserves. An additional 32,000 people arriving in City every year will impact significantly on essential services such as transport, schools and healthcare.

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"We estimate that this acceleration will raise the annual building requirement from around 6,000 residential units per year to almost 13,000. We are only on course to deliver 2,800 units this year and the prospects for 2016 are not much better. Ultimately this means that an already tight market is going to get tighter still."

While Mr McCartney said that the housing market has slowed considerably and is likely to remain flat until next spring, he said the growing imbalance between demand and supply is building up pressure on rents and prices.

He continued: "Regardless of people's mood or financial circumstances they need to consume retail services at some level. Therefore it stands to reason that an increase in numbers should boost the demand for shopping space and drive retail rents."

(CD/LM)