New homes supply still trailing demand
Industry experts warn that Irish new home builds are slowing down at a time when the demand from buyers continues to soar.
New homes supply in Ireland right now appears to be a case of ‘one step forward, and two steps backward’.
In the years prior to last year’s General Election, Government had to be beaten into acknowledging the need for – and then upping target figures for – new homes needs and delivery.
In the latter half of 2024, the Government parties forecast completions close to 40,000 units; the outturn – as we learned post-election – was way lower, in the low 30,000s.
Now, this current year, we might be lucky to even match that low figure post-election, despite every political party acknowledging there is a housing crisis, that ‘urgent action needs to be taken,’ and we might even be lucky to even hit 30,000 again by the end of 2025.
That’s despite the belated setting of targets of 300,000 new homes between 2025 (now) and 2030 (not that far away,) so we should be building up to and over 50,000 units per annum – ‘going forward’, as politicos like to say.
Only, we seem to be going backwards.
This week’s Central Statistics Office Quarter 2 (Q2) figures for this year make for grim reading, with a reported decrease of 12.5% in the total number of dwelling units approved, down to 7,447 from 8,513 units in Q2 2024.
Of that, houses make up 63% and apartments the remaining 37%: the Dublin area which represented 24% of all grants had the sharpest falls in numbers, at 35.5% overall.
Nationally, the fall was disproportionate across the two build types, with apartment approvals down 21.4%, and houses down ‘just’ 6.45%. Down too were one-off planning grants, by 3.2%, but this was from a larger fall of 4.5% in Q1 between 2025 and 2024.
Worryingly, the 12.5% drop overall in Q2 2025 was higher than the 2.5% drop for the first quarter of 2025 vs Q1 2024: we seem to be chasing that dangerous, elusive thing, the falling knife?
Of the 4,722 new houses granted planning permission in Q2 2025 the Mid-East/Dublin region had the highest proportion at 18.9% (893), followed by the South-West region with 17.3% (815) of house approvals.
Interestingly, though, the CSO said Cork County Cork “had the highest proportion of houses granted planning permission at 16.0% (757 houses) in the state in Q2 2025. Dublin county had the second highest number of houses granted planning permission at 12.3% (583 houses), followed by Galway at 9.3% (439 houses).”
Leitrim was lowest at 9, Longford at 10 houses, and Cavan at 13.
That’s the bleak CSO position on the planning pipeline and it comes just a few weeks after the Banking and Payments Federation Ireland (BPFI) produced figures to mirror the downward instead of upward trend in residential construction, at a time of greatest need.
The lobby group the BPFI, with a finger on the money strings’ pulse, this month reported a construction slowdown in terms of housing starts, showing an 84% drop between April and June, to just 3,407 units. This, it reported, followed a Q1 2025 drop of 76% in commencements, and that was well under the level of completions, put at 15,000, for the combined first six month/H1 period.
Not only were the 7,384 commencements in the first half of ’25 (H1) down on 2024, they were “less than half the number of units commenced during the same period between 2021 to 2023,” noted BPFI chief economist, Ali Ugur.
Thus, there seems to be a market supply lag coming between starts and completions, given the low level of commencements and the higher/more reasonable level of completions, while in a further tightening of stock for private purchasers to pursue, the BPFI also notes that almost 25% of housing purchases last year were by approved housing bodies (AHBs) or by local authorities.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
