The property market in Ireland has confounded all of us for a very long time. It sparked a revolution in the days of the Land League. It brought the State to its knees in more recent times. It's been prodded and pumped along the way. Some of the prods helped; some were disastrous.

The incentivisation of investment funds to enter the Irish market after the crash was one of those prods. That idea is now under the white heat of an intense political debate.

When a population is growing, as Ireland’s is, those who wish and need to rent a property and those who choose to purchase a property are often both chasing the same thing: newly built homes.

At the end of 2019, the Central Bank published a study which estimated that 34,000 new dwellings would need to be built each year out to 2030. In 2019, just over 21,000 units were completed. In 2020, despite Covid, 20,584 new units were built. The completion of new homes in the first three months of this year was down 20.1% on the same period in 2020. Forecasts for completions this year range between 15-20,000.

The latest published figures from the Department of Housing, Local Government and Heritage show there were just under 62,000 households on the social housing waiting list in November 2020. That was a reduction of 6,813 or 9.9% on the numbers on the list in June 2019.

That gives you some idea of the scale of demand that needs to be met over time. Of course, not all may end up being accommodated in newly built units. But a big percentage of those families will need new homes to be built.

In the meantime, the latest figures from the Banking & Payments Federation Ireland show that buyers are back. The volume of mortgages drawn down by first time buyers in the first quarter of this year is up 7.3% compared to the first three months of last year. The federation says it’s the highest volume of drawdowns by first time buyers since the first quarter of 2007.

The total number of mortgages drawn down was 9,091. Of those, 52% were first time buyers. That’s in one quarter. The pattern of mortgage drawdowns is for the volume to increase over the year. That means a lot more people looking to buy homes. The increase in approvals bears this out.

Then there are those looking to rent privately. Taken altogether, the Irish property market clearly has many more people in need of somewhere to live than we are building new homes to house them. When this happens, prices tend to rise.

Watch: How are investment funds impacting housing in Ireland?

The latest Residential Price Index showed the annual increase in house prices nationally was 3% in February. The Rental Tenancies Board latest rental index for the last three months of 2020, showed rents rising by 2.7% nationally and by 5% in the greater Dublin area counties of Meath, Wicklow and Kildare.

The strict lending limits imposed on borrowers by the Central Bank has kept some property price inflation suppressed. This is thought to have contributed to the moderation in house prices seen in 2019, pre-Covid. People can’t afford to spend more on a property because the amount they can borrow is capped.

But such restrictions don’t apply to investment funds. Perhaps more controversially, it also doesn’t apply to the State through local authorities, for what it pays to purchase properties.

The index also shows that just over 5,000 or 13.5% of the properties (new and second-hand) purchased in Ireland from March 2020 to February 2021 were bought by 'non-occupiers'. This is often interpreted as investors. But as Dermot O'Leary of Goodbody Stockbrokers pointed out on Morning Ireland this week, one of the big 'non-occupiers' is actually the State in various guises, whether that’s local authorities or other bodies.

In fact, in 2019, 61% of the property purchased under the 'non-occupier' category in 2019, according to Goodbody’s, was purchased by the State. That makes sense if it’s homes being used to reduce social housing waiting lists. But at the very least, it also dilutes the perception that it’s the investment funds that are swooping up vast swathes of housing stock at the expense of individual buyers.

What is clear is that only a minority of first-time buyers are purchasing new homes.

The Central Bank’s Household Credit Market Report shows that only 27% of first time buyers in Dublin bought a new property in the first quarter of last year. It was higher at 35% for first-time buyers outside Dublin.

If you look at the latest median, or mid-point, price of homes purchased in February you can guess at one of the reasons why.

According to the CSO's database, the median price for a new property in Dublin was €422,500. The median price for all counties was €345,000. The average loan size for Dublin first-time buyers, according to the Central Bank, was approximately €300,000 and for first timers outside the capital, just over €200,000.

These mortgages come with staggering average deposits of just over €80,000 for Dublin first-timers and almost €48,000 for those outside Dublin.

Despite this, new homes are clearly still too expensive for most first-time buyers.

And the trend continues.

The latest BPFI data shows that new properties accounted for only 23.3% of mortgages in the first quarter of this year. That’s the lowest share since the fourth quarter of 2016. For 'mover purchasers' it’s the lowest share since the data series began in 2003, falling by 28.8% in a year.

There are lots of problems besetting the property market. But when people can no longer afford to buy new homes, there’s a pretty fundamental snarl-up coming down the tracks.