Concerns Over Future Housing Output Amidst Decline in Commencements
The Banking and Payments Federation Ireland (BPFI) has raised concerns about a potential reduction in housing output for 2027 unless a strong rebound in housing commencements occurs throughout 2026. The latest figures from the BPFI’s housing market monitor reveal a significant drop in commencements, highlighting potential risks to future supply.
In 2025, Ireland saw over 16,000 housing commencements, a sharp decline from more than 69,300 in 2024. This previous surge was driven by developers rushing to capitalize on expiring development levy waivers, according to irishexaminer.com.
Housing Completions and Apartment Surge
The country witnessed a total of 36,284 home completions in 2025, a 20.4% increase year-on-year. The surge in completions was primarily due to a significant boost in apartment construction, reaching 12,047 units, a 38.7% jump from 2024.
Despite this positive outcome, the BPFI cautions that the low number of commencements in 2025 could adversely impact output in 2027. Key areas such as Dublin city and surrounding regions have experienced sharp declines, with commencements in Fingal and South Dublin plummeting by almost 84%.
Self-builds on the Rise
Interestingly, self-builds accounted for 23% of all starts in 2025, the highest share since 2018. Units commenced in 2024 are expected to reach completion by the end of 2026 to benefit from levy waivers, potentially boosting output to nearly 39,000 units, assuming the current momentum in construction continues.
Trends in Second-hand Property Market
The number of existing homes sold fell for the third consecutive year in 2025, totaling 38,502—the lowest level since 2020. Many homeowners appear to be opting to stay and invest in their current properties, rather than moving. Spending on home improvements has soared from €3.9 billion in 2019 to over €8 billion in 2025.
Mortgage Market Developments
Despite the challenges in commencements, the mortgage market has shown resilience. Annual mortgage drawdowns increased by 7.7% in 2025, with first-time buyers making up 60% of all drawdowns. However, mover purchaser mortgages accounted for a mere 19% of the market, indicating a preference for staying put among homeowners.
The BPFI remains cautiously optimistic about the housing and mortgage markets for 2026 but emphasizes the need for a significant uptick in housing commencements to avert a potential supply crisis in 2027.
