€4.2 billion in capital was pumped into the Irish commercial and residential property market by foreign private finance providers each year between 2017 and 2019, new analysis has found.
This represented nearly 78% of the total private funding in each of those years, when around 13,000 residential units were built, the report by Irish Institutional Property (IIP) concludes.
The remaining 22%, or €1.2 billion, came from domestic sources.
However, the analysis forecasts that as housing output climbs to the required annual level of at least 30,000 units in the coming years, the capital requirements to pay for that construction will more than double to €11 billion a year.
Some 86% of that money, or €9.5 billion, will have to come from international investors the reports estimates.
The remaining €1.5 billion needed is set to be provided by Irish funders.
The data comes amid intense scrutiny on the role being played by international institutional investors in buying up large numbers of residential units for rental, displacing potential first-time buyers and those seeking to trade up in the process.
In recent days, the Government has said it is considering introducing measures to prevent such bulk-buying of homes in new housing estates.
The study by IIP, which represents institutional property investors operating here, states that the housing crisis here will be solved primarily by a significant increase in the supply of units delivered by private developers.
It estimates that in a scenario where annual new housing output is 20,000 a year, €4.4 billion in funding a year will be required from international residential development finance providers.
This rises to €5.7 billion each year if output is at 25,000 units per year and €7 billion if it increases to 30,000 homes a year.
The report says that American funds that moved into the sector after the financial crash have largely been replaced by European long-term investors who provide capital through private Irish entities, making it hard to identify and quantify the flow.
It also claims that capital in Ireland is still charged at a premium compared to European countries because of the smaller scale of the market and massive historic volatility. This drives up housing costs and diminishes affordability, it adds.
"The more the Government does to signal to the international capital markets that Ireland will remain a safe and stable investment environment, the better chance there is that the 'risk premium' that developers and mortgage holders currently pay in Ireland will be eliminated over time," it claims.
The analysis also says that the decision of both Ulster Bank and KBC to exit the Irish market will undoubtedly further reduce potential expansion in domestic lending in the medium-term.
The balance sheets of the existing pillar banks remains constrained, it states, and notwithstanding an increasing role envisaged for the state and approved housing body sector, a domestic "funding gap" is likely in the medium-term.
Commenting on the report, Dermot O'Leary, chief economist at stockbroker Goodbody, said Government measures that would chase away capital from Ireland could have disastrous knock-on implications for housing supply over the coming years.
"The bottom line here is that without international capital, the financing of much-needed offices to facilitate the surge in FDI jobs over recent years would not have been able to happen and the required ramp up in housebuilding in the coming years cannot happen either," he said.
"In this way, stable international capital to fund REITs and PLCs, is crucial for Ireland. As the government assesses what it may do to deal with the recent political fall-out from investment funds buying up housing estates, it will do well to pore over the numbers in the IIP report this morning."