Budget must contain measures to incentivise new homes, say experts

Leading property sector commentators believe that a pro-housing Budget will be critical for the home building sector. Tommy Barker, Property Editor, reports

Property sector commentators are hoping that the next Budget will contain incentives to drive new housing developments.

The coming Budget next month may bring further news and initiatives to help free up Ireland’s sclerotic home building market, following months of submissions and reports from the various analysts, professional bodies, vested interests and lobby groups, political forces and individuals.

In advance of Budget 2026, Government has taken some actions aimed at increasing supply and identifying ongoing bottlenecks in the mis-match with escalated demand and population growth, including the new Section 28 Guidelines (July 2025), instructing local authorities to update their development and zonings plans to allow for c 55,000 new homes per year to 2034, with ‘headroom’ for up to 50% more zoned land to allow for land that may remain inactive or unserviceable.

Also addressed was the thorny issue of Rent Pressure Zones, a delicate balancing act with a double-edged sword (to mix the metaphors), as trying to incentivise investors will impact already the highest-ever rent levels.

Anticipating announcements in the Housing for All strategy in and after the Budget in October “should bring certainty on policy and allow stakeholders plan for delivery across all tenures be that private, social, cost rental and rental,” says Paul Hannon, New Homes director with Sherry FitzGerald, adding that moves to allow variations to planning permissions, as well the upward-revise housing targets local authorities ”should result in more zoned land and, critically, infrastructure in the form of utilities and social amenities.” 

The rollercoaster ride evident right now of completions inching along, against a worrying background of a dip in planning grants and housing starts is of huge concern, with variations across house vs apartment types, where attempts to improve viability see developers applying for Croí Cónaithe subsidies to build close to 6,000 apartments: in Cork Croí Cónaithe has seen 150 apartments sell this year between the Bayly Douglas (90, via Savills) and Blackrock Villa schemes (60, via Sherry FitzGerald), and ongoing supports are vital for Cork’s north and south docklands schemes.

With momentum currently slowing, though “there are levers the government can pull, such as VAT on apartments, hopefully there’s the fiscal space to reduce costs and aid viability and affordability: there needs to be greater alignment of ambition and coordination of delivery across government departments, particularly as it relates to critical infrastructure delivery,” according to Mr Hannon.