As you already know, I am a stickler for any information relating to affordable housing – or any development that may get in the way of potentially affordable housing.
Based off a very recent report from Breaking News.ie, the latest figures from the Central Statistics Office (CSO) paint a grim picture for Ireland’s housing sector, with a significant drop in the number of housing units granted planning permission in 2024 compared to previous years.
Buying a House in Ireland: A Step by Step Guide by a Builder/Solicitor
To summarise:
1. Total Housing Approvals Fell
- 19,207 house units were granted permission in 2024, down from 19,738 in 2023. (A 2.7% reduction, which is quite significant during our current housing crisis.)
- Apartment approvals saw a much steeper decline, dropping to 13,194 in 2024 from 21,487 in 2023. (A 39% reduction!)
2. Q4 2024 Planning Approvals Collapsed
As seen above, the total number of approved dwelling units fell by 39% in Q4 2024.
This steep drop suggests a shrinking pipeline for future housing supply.
A. Industry Concerns About the Planning System.
The current Irish planning system remains a major bottleneck in housing delivery, hindered by:
- Long approval delays, redtape and legal challenges.
- Inconsistent decision-making across local councils.
- Developers are hesitant to invest in housing projects due to the uncertainty surrounding approvals.
B. Funding Challenges for Housing Delivery.
- The Irish government estimates that €20 billion annually is needed to meet housing targets.
- The vast majority of this funding must come from private investment.
- However, investors and developers hesitate to commit capital due to regulatory uncertainty.
C. Infrastructure Delays Stalling Housing Projects:
- Developers face significant delays in securing utility connections from Irish Water and the ESB.
- Costly infrastructure upgrades (e.g., substations, pumping stations) are required before homes can connect to essential services.
- These delays slow down housing delivery, increase costs, and restrict supply.
Possible Implications for Ireland’s Housing Market in 2025
With planning approvals at their lowest level in years, Ireland’s housing crisis is poised to worsen unless immediate action is taken. Here’s what I believe the ongoing decline in approvals could mean for the Irish market :
1. Housing Supply Shortage Will Continue
- New housing projects are not keeping pace with demand, meaning Ireland will struggle to meet its ambitious Housing for All targets – which aims to build over 300,000 new homes will be built by 2030, including a projected 54,000 affordable homes for purchase or rent and over 90,000 social homes.
- Fewer new builds in the pipeline will worsen the current shortage, keeping house prices and rents artificially high.
- First-time buyers and renters will face even more difficulty securing affordable homes.
2. Private Investment May Slow Further
- The uncertainty in the planning system discourages private investment in housing projects.
- Without private sector participation, the burden of financing housing delivery will fall more heavily on the government.
- Fewer financial backers mean that developers may scale down projects or abandon them altogether.
3. Modular and Alternative Housing Solutions Are More Important Than Ever
Given the delays in traditional construction and the unpredictability of planning approvals, Ireland needs to pivot toward faster, more flexible housing solutions.
- Modular homes and timber-frame construction offer faster build times and reduced costs.
- Prefabricated social housing projects have already been successfully implemented in the Republic of Ireland (e.g., rapid-build social housing projects).
- The government could accelerate modular home adoption by easing planning restrictions for factory-built housing solutions.
4. The Planning and Development Act Needs Urgent Implementation
- The new Planning and Development Act, which was meant to streamline planning approvals, is still not fully in force and may not be effective for another year as additional regulations are yet to be finalised. (Ian Lawlor, Managing director of Roundtower Capital – a provider of finance to property investors and developers in Ireland)
- Additional regulations need to be finalised before the Act can be implemented, meaning it may not take effect until 2026.
- This delay creates further uncertainty, further discouraging developers from submitting new planning applications.
5. Public Housing and State-Led Development Could Help Fill the Gap
- The Northern Ireland Executive (NIE) recently pledged 5,850 new social homes by 2027, which could serve as a model for state-led housing projects.
- The Irish government could consider scaling up social and affordable modular housing solutions to help bridge the gap.
Potential Solutions to Address the Crisis
I don’t want to make this blog post longer than it needs to be as I have addressed the same situations in several other blog posts up to this point. In order to prevent further deterioration of the housing situation in 2025 and beyond, Ireland needs a multi-faceted strategy:
1. Planning System Reform
- Fast-track approvals for social and modular housing developments.
- Streamline environmental and zoning regulations to reduce bottlenecks.
- Increase transparency and standardisation in decision-making across local councils through the introduction of a National Digital Planning Portal that ensures all planning applications are reviewed using the same standardised criteria, reducing inconsistencies between different local authorities. At the moment, building permissions vary a lot across different councils.
2. Prioritise Modular and Timber-Frame Homes
- Leverage Ireland’s forestry resources to expand timber-frame modular construction, reducing reliance on costly cement and concrete in the meantime.
- Introduce financial incentives for developers who use sustainable, off-site/modular construction methods.
- Grant automatic exemptions for modular homes under a certain size, by removing some planning permission barriers.
3. Improve Infrastructure Delivery for New Homes
- Speed up utility connections for new developments by investing in grid and water infrastructure upgrades.
- Require Irish Water and the ESB to fast-track approvals for critical housing projects.
4. Attract More Private Investment
- Offer targeted tax incentives for developers building social and affordable housing.
- Create long-term certainty in planning policies to reassure private investors.
- Encourage pension funds and REITs to invest in the rental sector by addressing financing and regulatory concerns.
Final Thoughts
Ireland’s housing market is at a crossroads. The decline in planning approvals signals a deepening supply crisis, making it harder for young people and families to find affordable homes. Unless the planning system is fixed, and alternative solutions like modular housing are expanded ASAP, the crisis will persist.
Immediate action is required—from government reforms, private sector participation, and innovative housing solutions—to ensure Ireland can build enough homes to meet growing demand. The future of the housing market depends on policy decisions made today.
