As many as 20,000 more people in their 20s and 30s moved out of their parents’ homes in 2011 compared to 2006 because the fall in rents caused by the economic crash made setting up on their own cheaper, according to research published by the ESRI

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However, a reversal recorded in recent months is likely to see many young people decide to live at home for longer. The perception that house prices are on their way up is likely to incentivise those renting to try to buy now, which is likely to put price pressure on a market suffering from a lack of supply.

Key factors

The research identifies key factors that affect the timing of a person’s decision to move out of their parents’ home including income, gender, the cost of housing and whether or not they are immigrants. Women and the children of immigrants are more likely to move out at a younger age, the study says.

Since the property crash, a dramatic decline in the cost of rent led to people setting up independent households at an earlier age than at the height of the boom and, according to the ESRI, 2.3 per cent more 25- to 29-year-olds moved out of their parents’ homes in 2011 than would have been the case before the crisis. It also recorded a 2.1 per cent increase among 30- to 34-year-olds moving out.

"I would characterise what we have seen as a large shift in behaviour as a result of falling rents," said David Byrne, an author of the report. "Rent fell after the property crash, so young people could afford to move out and rent, often sharing accommodation. This is a change from what Irish people traditionally did." Recent months have seen rents and house prices rise substantially, particularly in urban areas. Mr Byrne says the shift will most likely see many young people stay in the family home for longer.

Incentive to own

“When house prices increase, people often expect them to continue rising, providing an incentive to own instead of renting,” he said. “The model used in this research suggests that 2.6 per cent of those who would have been content to rent, would probably now prefer to buy. This is contributing to the upward pressure on prices.”