Subdued housing activity and potential labour constraints could impact future output – BPFI Housing Market Monitor
- Over 11,600 units commenced in the first ten months of the year, only slightly higher than the levels observed back in 2016.
- Slowdown in the time from commencement to completion for new homes, with 12-month completion rates at only 10% for units commenced in 2024.
- Number of people employed in skilled trades in the construction sector has fallen by around 35% since 2007.
- Housing sector faces challenges in boosting output beyond 2026 unless commencement levels improve substantially in early 2026
Friday 19th December 2025 – The latest Housing Market Monitor Q3 2025, published today by Banking & Payments Federation Ireland (BPFI), shows that while housing completions show modest growth in the twelve months to September 2025, commencement activity remains subdued, at only slightly higher levels than 2016. At the same time, the number of people employed in the construction industry in skilled trades has fallen by around 35% since 2007 with significant gaps in key trades such as plastering, tiling, painting and plumbing. This slowdown in housing starts and potential labour constraints could impact future output.
Total housing completion numbers expected to reach around 35,000 units in 2025
Outlining the key findings from the monitor, Brian Hayes, Chief Executive of BPFI stated: “Today’s report shows that almost 33,000 new dwellings were completed in the twelve months ending September 2025, up from about 31,700 during the same period in 2024. In the third quarter of the year, completions were 4% higher than the same period in 2024. Completion activity is on average much higher in the last quarter of a year; notwithstanding the fact that completions levels in the last quarter of 2024 was weak. If similar levels of housing output seen in the last quarter of 2023 is achieved in the last quarter of this year, we expect total housing completion numbers to reach around 35,000 units in 2025.”
Over 11,600 units commenced in the first ten months of the year, only slightly higher than 2016 levels
Mr Hayes continued: “Looking at commencements, meanwhile, in the twelve months to October 2025, 23,599 housing units were commenced. This twelve-month period includes units commenced in December 2024 when the numbers were heavily affected by the significant activity due to the expiry of waivers on development levy and water connection charges. If we assume that around half of the total units commenced in December 2024 were due to expiry of waivers, annualised commencement numbers would have been around 18,000 units, which is lower than the commencement activity in the same period in 2020 during the pandemic. Just over 11,600 units were commenced in the first ten months of the year, which is only slightly higher than the levels observed back in 2016. By local authority, the most units commenced during 2025 so far have been in Dublin City (2,053) followed by Cork County (1,089) and Fingal (911) while only 20 units have commenced building in Galway City during that time.”
Considerable slowdown in the time from commencement to completion for new homes
“At the same time, a recent report by the Department of Finance found that there has been a considerable slowdown in the time from commencement to completion for new homes following a spike in commencements associated with the levy waivers in 2024. For example, 40% of commencements in 2018 had at least achieved partial completion within 12 months. This rate remained within the 20%-30% range in the following years but the analysis shows that for units commenced in 2024, the equivalent figure was only 10%, which suggest that projects commenced in 2024 are progressing more slowly to completion compared with previous years.
Potential labour constraints may impact capacity with significant gaps in skilled trades
“While construction sector employment has increased in recent years, employment in the sector remains around 50,000 lower than its peak in 2007. For residential construction projects, skilled trade roles have traditionally been critically important in order to deliver housing output however, relatively slow growth in recruitment in skilled trades may point to potential labour constraints on building capacity. According to the Department of Finance analysis, the number of managerial and administrative roles in the sector has increased faster than the number of people employed in skilled trades or as operatives, which has fallen by around 35% since 2007. In the first half of 2025, employment in the sector increased by around 11%, however the growth in skilled trades was around half this rate. In addition, the most recent apprenticeship registration numbers and demand analysis shows that, there are still significant labour supply gaps in some of the skilled trades, especially plastering and tiling, painting and decorating and plumbing.”
Mr Hayes concluded: “Looking at the current commencement activity in the residential construction sector, it looks challenging for the sector to increase output significantly after 2026 unless we see a significant increase in the commencement activity in the first half of next year. In addition, there still seems to be skills gaps for certain occupations in the wider sector, and especially in the occupation groups where residential construction sector heavily relies on in order to increase output significantly.”
“The Government’s new housing plan will introduce a range of measures aimed at alleviating some of these pressures and boosting supply. These include initiatives around regulatory reforms on planning and zoning, tax incentives such as VAT reduction on apartments and a significant capital investment both directly on housing projects as well as major infrastructure needs in water, energy and transport. In addition, a new equity fund will be launched in the new year with the participation of Ireland Strategic Investment Fund (ISIF) and the Irish banking sector in order to provide equity capital to viable housing projects. Altogether, these measures should help overcome challenges around the availability of zoned and serviced land, associated infrastructure needs and the required investment both at a domestic and international level to fund new projects.”
ENDS/
The BPFI Housing Market Monitor Q3 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.
