ESRI to warn Government of no major uptick in housing supply this year or next

There will be no major uptick in housing supply this year or next year, the Economic and Social Research Institute (ESRI) is due to tell the Oireachtas Committee on Housing on Tuesday.

While the ESRI is currently forecasting just over 34,000 new homes will be built this year and 37,000 in 2026, “most of the risks weigh on the downside”, researcher Conor O’Toole will say in his opening statement to the committee.

The latest housing targets set by the Government aim for a total of 303,000 new homes to be built by 2030, starting with 41,000 homes this year and rising incrementally to 60,000 homes a year by 2030.

A total of 30,330 homes were built in 2024, a decrease from 33,000 in 2023, which the ESRI points to as a “notable weakness”.

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This slowdown in completions is likely to be driven by housing production factors such as land costs and availability, labour costs, the cost of financing, price developments and policy environment, the ESRI tell the Government.

“Taking these factors together, coupled with current international uncertainties, we do not foresee any major uptick in 2025 and 2026 in housing supply,” Mr O’Toole will say.

He points to planning as one of the constraints on the Irish housing system, saying the “time frames, delays and decision making in the system can add substantially to the cost of production”.

“Streamlining the planning process and ensuring consistency in decision making on applications would improve efficiencies,” Mr O’Toole will say.

The ESRI will say reform of the land market is also important to ensure more zoned land, pointing to Austria where “active land management” is a feature of its well performing housing sector.

[ Almost 2,000 applications for just 20 Dublin cost rental homesOpens in new window ]

The Central Bank will also address the committee on Tuesday, with director of economics and statistics Robert Kelly due to give a statement.

He will point to United States tariffs as a potential pressure on Ireland’s economic stability and one which “could significantly impact domestic growth over the medium term”.

Looking at the shortfall in housing stock over the last number of years and the need to clear the backlog of new homes needed, Mr Kelly will warn of the risks of not addressing these issues.

“Not addressing this shortfall is costly. Beyond the high social cost, inadequate housing supply will lead to rising rents and house prices. This, in turn, will drive up living costs, reduce disposable incomes and intensify wage pressures, undermining our competitiveness as a small open economy,” Mr Kelly will say.

“Increasing delivery means addressing the fundamentals: Preparing serviced land, streamlining planning and lifting construction productivity. These are not optional or sequential steps; they must move in parallel.

“In an external environment where the fog of uncertainty is building, the housing sector needs cohesive policies that do the opposite – remove complexity, provide clarity and create conditions for long-term investment and delivery,” Mr Kelly will say.