New home completions predicted to fall well short of targets again this year 

Report by consultancy firm Mitchell McDermott says housing output in Ireland this year could be as low as 32,000 units

The Mitchell McDermott report shows that planning permission was granted for just 35,000 homes last year — one of the lowest figures over the last six years and down from 41,000 in 2023. Picture: Larry Cummins

Ireland’s output of new homes is stagnating and is likely to fall well short of targets for a second year, a report has forecast.

Last week, the Central Statistics Office (CSO) confirmed that just 30,330 new homes were completed last year — far below the 40,000 forecast by then taoiseach Simon Harris and housing minister Darragh O’Brien.

However, an analysis by construction consultancy firm Mitchell McDermott says housing output this year could be as low as 32,000 units.

Despite a surge in construction starts of new homes last year, Mitchell McDermott said planning permission was granted for just 35,000 homes last year — one of the lowest figures over the last six years and down from 41,000 in 2023.

Paul Mitchell, one of the report’s authors, said unless drastic measures are introduced immediately there is little chance of the new Government reaching its target of 300,000 new homes by 2030.

Mitchell McDermott co-founder and director Paul Mitchell: 'Based on current ratios, if we want to build 50,000 units a year, we would need to have planning applications for 125,000 units submitted every year.' Picture: Keith Wiseman

He said one of the key areas which must be addressed is the “high mortality rate” of applications for housing schemes in our fast-track planning system, with only 40% of housing developments seeking permission proceeding to construction.

Between 2018 and 2024, planning was submitted for just under 200,000 units in strategic housing developments (SHDs) and large-scale residential developments (LRDs).

“Our figures show schemes accounting for almost 42,000 units (21%) were refused, a further 27,000 (13.5%) were subjected to judicial reviews, and 11,000 (5.5%) are awaiting a decision,” Mr Mitchell said.

“In the end, schemes with just over 112,000 units or 56% of total applications received usable permissions.

That figure is disappointingly low, but even more disappointing is the fact that another 29% of these units have not been constructed or commenced construction.

“This means that only 40% of the original number of planning applications, 80,000, have been developed or are in the process of being developed.”

“Given the scale of our housing crisis, it’s vital we understand why the attrition rate is so high and address blockages in the system.

“It’s also clear we need to drive up the number of planning applications. 

"Based on current ratios, if we want to build 50,000 units a year, we would need to have planning applications for 125,000 units submitted every year.”

The CSO data shows the main reason for the fall in home completions was a fall of 24% in the number of apartments completed to 8,845. Mr Mitchell said the main reason apartment construction is heading south is largely due to previous government policy.

“The Government changed regulations in December 2022 and, as a result, build-to-rent was no longer permitted as a category under planning. The introduction of rent caps and the way they were introduced was the final straw for a lot of the international funds.”

He said the public sector stepped in when the private sector left, but they are running out of “steam and money”.

“No plan was put in place to plug the finance gap left by the international funds, and now we are seeing the effects of policy change,” he said.