A view of Central Bank of Ireland (Niall Carson/PA)
A view of Central Bank of Ireland (Niall Carson/PA)
Ireland is projected to miss its housing targets for the next three years, according to a report by the Central Bank.
According to the Bank’s first Quarterly Bulletin of 2025, housing completions are forecast to increase to 35,000 this year – down from the 41,000 target set by Government.
Senior government figures have been criticised for claiming during the election campaign that close to 40,000 new homes would be built in 2024, which would have been far in excess of its own targets.
This was despite the Bank projecting in its September Quarterly Bulletin that completions would hit around 32,000.
In reality, data from the Central Statistics Office revealed that only a total of 30,330 new homes were completed last year – below the target in the Housing for All plan of 33,450 new-builds in 2024.
Government ministers defended not relying on the Central Bank projection during the election campaign, instead saying they were using estimates by Deutsche Bank and Cairn Homes.
Now, the latest Central Bank figures suggest that the Government remains off track towards its revised housing targets.
The coalition wants to deliver 303,000 homes by the end of 2030, scaling up from 41,000 this year to 60,000 by the end of the that period.
The targets for 2026 and 2027 are 43,000 and 48,000 respectively.
However, the Central Bank states that delivery will fall below this rates in the next two years also: “Despite a projected pick-up in housing activity, overall investment is forecast to remain below required levels based on population growth and household formation.
“Housing completions are forecast to increase to 35,000, 40,000 and 44,000 in 2025, 2026 and 2027, respectively.
“This represents a downward revision in 2025 and 2026, owning largely to slower momentum in 2024, but a slight upward revision to 2027 in this Bulletin compared to the forecast in December 2024.
“Underpinning this downward revision is the outturn for dwelling completions for 2024 which came in at 30,330, a drop of 6.7% from 2023, and a weaker outturn than the figure projected in the December Bulletin – 32,500.”
The projections for 2025-2027 would put the Government 13,000 homes behind its own targets by the end of 2027.
The remaining targets are 43,000 in 2028, 58,000 in 2029, and 60,000 in 2030.
A significant rise in policy uncertainty in recent months is the most prominent feature of the current economic outlook.
The Central Bank says low productivity in the construction sector, delays in utility connection and the planning system, and a shortage of zoned and service land in high-demand areas are restraining housing supply.
Although housing commencements rose by almost 69,000 units in 2024, there is uncertainty over the proportion of these commencements that are likely to result in completed dwellings in the period out to 2027.
The Department of Housing said projections “can vary greatly amongst commentators” and a “much clear picture” would emerge as the year proceeds.
It added: “The Government is currently examining actions to help significantly scale up delivery and secure the increase in supply targeted in the immediate-term, as well as examining those that will help meet our housing needs over the longer-term.”
The Central Bank projections come as part of the Bulletin which shows an “unprecedented rise in policy uncertainty due to shift in geo-economic relationships”.
The Bank states the retaliatory tariff actions between large global trading blocs and wider US policy change remain as risks to the outlook.
Headline inflation is projected to rise to 2.2% in 2025 before declining to 2.1% in 2026, and further easing to 1.4% in 2027.
It also projects a gradual increase in unemployment as the economy slows but the overall rate is set to below 5%.
Robert Kelly, the Bank’s director of economics and statistics, said: “A significant rise in policy uncertainty in recent months is the most prominent feature of the current economic outlook.
“That rise in uncertainty is proportionately large in comparison to the available data, it centres on the shift in geo-economic relationships brought on by the signalled policy stances of the new US Administration, and the prospective responses from other major economies.
“Widespread announcements and implementation of tariffs and non-tariff barriers, and the need for Europe to evolve geopolitical priorities, present a very different landscape for the Irish economy than we have had in recent years.
“While our current central forecast for the domestic economy continues to point to a steady pace of growth out to 2027, the shift in policy uncertainty weighs on the outlook for consumption, investment and exports, and leads to the slower growth now expected in comparison to our last outlook issued in December.”
Mr Kelly added: “While the outlook is challenged by global events, the domestic economy has for the most part continued to perform well.
“This is most evident in the labour market, with the unemployment rate remaining at historical lows over the longest period of time since data are available.
“It is expected that steady employment growth will continue alongside growth in wages consistent with productivity developments and contained profit margins.
“These combine to underpin our central expectation that domestic inflationary pressures will remain in check over the forecast horizon, despite some near term elevation in energy prices which contribute to a higher forecast for HICP inflation in 2025.“
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