Residential construction slumped by 10.6 per cent in the first three months of 2025 compared to the same period last year, Central Statistics Office (CSO) figures on Friday show. Production in the sector was also down 4.3 per cent compared with the previous quarter.
It comes as a new report from estate agent JLL says that Dublin faces a second consecutive year of declining apartment completions, with the numbers built this year expected to be 40 per cent down on the 2023 peak.
The group’s Dublin Living Market Report, which covers the first half of 2025, said it will take several years before apartment output increases. Completions this year will be down by 17.8 per cent on 2024 levels.
Outside residential construction, the CSO data showed production volumes in building and construction more generally rose by 13.5 per cent in the first quarter compared with the same period last year. It was up 4.9 per cent on the previous quarter.
On an annual basis, volumes in the non-residential building and civil engineering sectors rose by 13.7 per cent and 35.9 per cent respectively. That helped boost overall construction production by value by 6.5 per cent on a quarterly basis and by 19 per cent on the same period last year.
JLL’s report said apartment completions are expected to rebound in 2026 and 2027 on the back of a “surge” in apartment construction starts last year when developers accelerated projects to capitalise on levy waivers.
Although some house building projects with lodged commencement notices did not proceed, JLL said its research suggests a large number of apartment units with lodged notices did start construction.
While apartment deliveries are projected to increase over the next two years, JLL noted that the 2024 report of the Housing Commission indicates it will still fall short of meeting demand.
It estimates that between 19,600 and 36,400 apartments are needed annually to satisfy housing needs. It said apartment completions will fall below this by an average of 49 per cent in 2026 and 2027.
Elsewhere, JLL said Ireland’s residential investment market experienced a “sluggish start” to 2025, with just €10 million deployed across two transactions in the first quarter.
However, it noted there are “signs of modest activity” in the second quarter, fuelled by a significant deal under offer and the expected completion of Ronan Group’s Spencer Place disposal to Ardstone Capital. This transaction, involving 393 apartments in Dublin 1, is valued at approximately €177 million.
The outlook for living investment in Ireland is “cautiously optimistic”, JLL said, underpinned by “strong economic fundamentals and an engaged Government attempting to attract institutional investment”.
“The Government’s active pursuit of institutional investment in the living sector is a positive step toward boosting the supply of new units, especially as apartment completions are expected to decline in 2025 compared to 2024,” the group said.
“While rent reforms might require further adjustments to generate the desired large-scale investment, the current Coalition has shifted the stance away from previous governments and now recognises the significant role private investors will play in addressing the housing crisis.”
The construction industry is lobbying for additional measures beyond rent reforms, such as VAT waivers for high-density developments or development levy waivers to improve project viability.
“A consensus has emerged among construction bodies, the Irish Government, and the European Commission regarding the critical need for productive investment in housing,” JLL added.
