As demand for housing continues and output stalls, coordinated national and local planning efforts needed to meet future demand – BPFI Housing Market Monitor
- Almost one in five consumers in Ireland report they were looking to rent or buy, the second highest rate in Europe
- Only one in ten (10.5%) owner occupiers said they were rather likely or very likely to sell
- Housing commencement numbers for the first four months of 2025 at around 40% of the levels observed in 2023 and similar to levels seen back in 2016
- Planning permissions declined by over 21% between 2023 and 2024
Thursday 12th June 2025 – The latest Housing Market Monitor Q1 2025, published today by Banking & Payments Federation Ireland (BPFI), shows that as demand for housing continues to rise and output stalls, a coordinated national and local effort, particularly across the planning system, will be needed for a sustainable pipeline of potential output to meet future housing demand.
Housing completions in Ireland declined in 2024 for the first time since 2013
Outlining the key findings from the monitor, Brian Hayes, Chief Executive of BPFI stated: “Today’s report shows that Ireland has seen substantial population and employment growth in the past decade, and with that has come a sharp increase in housing demand, during a period where the supply of housing has fallen behind. We know that Ireland’s population increased by around 735,000 people between 2014 and 2024 while in the same period, employment increased by nearly 739,000. Meanwhile, housing completions in Ireland declined in 2024 for the first time since 2013, excluding the period between 2020 and 2021, when the pandemic affected activity significantly. On a rolling 12-months basis, a total of 30,356 units were completed to the end of March 2025 compared with 31,681 units during the twelve months ending March 2024.”
Almost one in five consumers report looking to rent or buy
Mr Hayes continued: “In fact, demand for housing in Ireland continues to rise with almost one in five (17%) consumers in Ireland reporting that they were looking to rent or buy, according to the February 2025 European Central Bank Consumer Expectations Survey (CES) on housing. This is the second highest rate in Europe after the Netherlands (20.9%). Among those renting, more than a quarter (26.3%) were looking for accommodation, while one in five of those with a mortgage were actively looking for new housing. The strong demand for housing especially among first-time buyers (FTBs) is also evident in the fact that 17,144 applications were received by the Revenue Commissioners for Help to Buy in the first four months of this year, almost 5,000 more than in the same period of 2024. On the supply side, however, only one in ten (10.5%) owner occupiers said they were rather likely or very likely to sell.”
At most, half of 2024 housing starts are likely to finish this year
“Meanwhile, current indicators on commencements and planning permissions, show a mixed picture in terms of housing output in the medium term. Commencement numbers for the first four months of 2025 are discouraging at 3,945 units, around 40% of the levels observed in 2023 and similar to levels seen back in 2016. A decline in the number of units commencing was expected in 2025 after a strong outturn of just over 69,000 units in 2024 – mainly due to waivers on development levy and water connections charges – but the trend shows that this decline is likely to be sharper than expected. At most, we anticipate half of all units that commenced in 2024 to be completed in 2025, given that nearly 48% of all units that commenced in 2024 were apartments. At the same time, 73,626 units were granted planning permission in 2023 and 2024 in total, which is not encouraging for future potential housing output. Planning permission declined by over 21% between 2023 and 2024, with permissions issued for apartments dropping by more than 38%.”
Looking at mortgage activity, Mr Hayes added: “All the while, we continue to see strong demand for mortgages with 9,190 mortgage drawdowns in the first quarter of 2025 valued at €2.8 billion. Mortgage drawdown activity increased in volume terms by 10.3% year on year and 19.1% in value terms over the same period. Indeed, all mortgage customer segments grew year on year with first-time buyers (FTBs) and mover purchase mortgage drawdown values reaching their highest Q1 levels since 2007 and 2008, respectively.”
Updated housing requirements must be incorporated into planning system as soon as possible
Mr Hayes concluded: “We expect to see housing demand continue, mainly driven by demographic trends and mortgage demand, especially by FTBs due to the more positive outlook on incomes, with gross average earnings now surpassing €1,000 per week for the first time since the CSO data series began in 2008. On the supply side however, there is significant uncertainty in terms of housing output in the medium term. The recent government Bill enabling an extension of the duration of planning permissions of up to three years, for housing developments that are nearing the end of their duration, should help to increase planning permission numbers in the short term. However, demand will not be met in the short term and will only be satisfied in the medium term with a coordinated and sustained effort at national and local levels. In particular, following the approval of the Revised National Planning Framework, local authorities will need to update their current development plans as soon as possible so that updated housing requirements, which will be published soon, can be incorporated into the planning system for a sustainable pipeline of potential output in the medium term.”
ENDS/
The BPFI Housing Market Monitor Q1 2025 is available to download here.
Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has over 120 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace.
Contact: Fiona Murphy, Head of Communications, fiona.murphy@bpfi.ie or Jillian Heffernan, Director of Communications, jillian.heffernan@bpfi.ie.
