The Government must borrow in a "sustained by prudent manner" in order to generate funds to provide the level of public housing needed to meet the growing demand according to the Economic and Social Research Institute (ERSI).
A report published by the think-tank on Thursday warned the country "will fall significantly short of meeting the level of demand for accommodation in the absence of such investment", compounded by the impact of the Covid-19 pandemic, reducing the pace of delivery of new homes.
The report acknowledges the considerable investment now needed in many areas, including health and education, however, adds: "Without significant investment, we risk experiencing another decade of inadequate housing supply and result upward pressure on residential prices and rents".
The ESRI states the high cost of housing is a major factor in Ireland's increased cost of living compared to other countries, making the lack of stock "one of the biggest challenges to our competitiveness as an economy".
A commitment to provide the required housing supply, particularly social and affordable housing, could also reduce State spending in other areas, the report argues, highlighting the reduced need for schemes such as the Housing Assistant Payments (HAP) if more affordable homes were available.
Referencing the ongoing impact of the pandemic, the ESRI says the slow supply of housing risks exacerbating the imbalance between supply and demand, and "is likely to result in further upward pressure on house prices and rent levels".