Housing output up by one-third in Q1 2026 but capacity and planning remain key risks – BPFI
- Over 7,800 units were completed in Q1, 32.9% higher than in Q1 2025 with total completions expected to reach about40,000 units in 2026.
- Employment in the construction sector increased by almost 50,000 people between the first quarter of 2020 and the first quarter of 2026.
- Marked shift towards higher density housing with the terraced housing share of FTB mortgages increasing from 20% to 27% nationally.
- Number of units granted planning permission in the first quarter of 2026 declined by 1% compared to the same period in 2025, to just over 8,000 units.
Thursday 2nd July 2026 – There was strong housing output in the first quarter of 2026, with more than 7,800 new homes completed, up 32.9% on the same period last year, according to the latest BPFI Housing Market Monitor (Q1 2026). However, demand continues to outstrip supply, with construction capacity and planning remaining key risks to meeting Ireland’s housing needs.
Housing completions in Q1 2025 reached highest first-quarter level since the series began in 2011
Outlining the key findings from the monitor, Ali Ugur, BPFI Chief Economist stated: “Residential housing construction activity began the year strongly, with over 7,800 units completed in Q1, up by almost a third (32.9%) compared to Q1 2025 and the highest first-quarter level since the series began in 2011. There was strong growth across all housing types, with scheme houses accounting for more than half of the year-on-year increase. On an annualised basis, output exceeded 38,000 units by March 2026, up from 36,284 in 2025, with total completions expected to reach about 40,000 units in 2026.”
“The imbalance between housing demand and supply remains evident in price developments. Central Statistics Office (CSO) data indicate that average house prices increased by 6.2% in the year to April 2026, easing from 6.7% in March. The median price paid was €395,000. While annual price growth has moderated since peaking in February 2022, April 2026 data show no month-on-month increase, suggesting a continued slowing in price inflation.”
Enhancing construction sector employment and skills will support growth
Turning to employment figures, Mr Ugur continued: “Strong employment growth has been a key driver of housing demand. Total employment increased from 2.4 million in Q1 2020 to nearly 2.8 million in Q1 2026, according to the CSO, an increase of around 400,000. The fastest growth was recorded in Education (35%), Construction (33%), ICT (31%) and Financial Services (30%). However, employment growth has recently stalled, with no overall increase in the year to Q1 2026.”
“In Q1 2026, the number of workers employed in construction was 195,600, up from 177,800 in Q1 2025. Among these, 62% mainly worked on new housing developments or renovations. Employment in the sector increased by almost 50,000 people between the first quarter of 2020 and the first quarter of 2026. As housing output increases and firms make greater use of modern methods of construction to enhance productivity, more workers with the right skills, including both traditional construction crafts and modern manufacturing and assembly techniques, will be needed.”
Housing density is increasing among FTBs
Commenting on changing property trends among first-time buyers, Mr Ugur added: “Semi-detached houses have traditionally been viewed as the starter home for FTBs. However, between 2021 and 2025, there has been a marked shift towards higher density housing around the country with the terraced housing share of FTB mortgages increasing from 20% to 27% nationally. In Dublin, 42% of FTB mortgages were for terraced houses, up from 37% in 2021, while in the Dublin Commuter region the share jumped from 16% to 28%. In the new-build FTB segment, more than half (53%) of Dublin mortgages and one third (31%) of Dublin Commuter mortgages were for terraced houses.”
“This shift towards higher density housing is also evident in the decline of average new dwelling size, where on average housing units seem to be 30% smaller than they were in 2016. While this partly reflects the changing shares of dwelling types, single houses and scheme houses were 18% and 16% smaller, respectively.”
Planning permission declined by 1% in Q1 2026
Addressing the planning pipeline, he noted: “The latest CSO data shows that the number of units granted planning permission in the first quarter of 2026 declined by 1% compared to the same period in 2025, to just over 8,000 units. In the five-year period between 2021 and 2025, nearly 186,000 units were granted permission which averages to just over 37,000 units per annum. Apartments accounted for nearly half of the total number of planning permissions granted during this period. Recent research by the Central Bank of Ireland and the Department of Finance shows that it takes an average of 14 months for housing developments to around 18 months for multi-unit apartment projects to move from planning permission to an actual commencement, while the delay can be more prolonged in Dublin City area where the delay can be over 21 months. Given the need to build around 50,000 units per annum to meet current and pent-up demand in the housing market, a much higher number of units would be needed in the planning system.”
Mr Ugur concluded: “While the Irish housing market has entered a period of stronger output and early signs of stabilisation, the underlying imbalance between supply and demand remains in place. Looking ahead, the key challenge is one of scale and delivery. Expanding construction capacity, accelerating the planning pipeline, and reducing delays between permission and commencement will be critical if output is to move closer to the estimated 50,000 units required annually.”
ENDS/
The BPFI Housing Market Monitor Q1 2026 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.
