New GeoDirectory figures reported by RTÉ show a strong rise in residential construction activity. More than 30,000 residential buildings were under construction in June 2026, almost 28% more than a year earlier. RTE News
There are positive signs elsewhere too.
- Some 37,128 new addresses were added in the 12 months to June, which is a 12% annual increase.
- while the number of properties classed as derelict fell by 3.5%.
After years of housing shortages, rising rents and growing house prices, I have to admit that an increase in home construction is news worth welcoming. But as you’d expect, it also raises an important question.
As Ireland continues building more homes, when will housing actually become more affordable?
1. What Do the Latest Housing Figures Tell Us?
According to GeoDirectory, Dublin had the largest number of new residential homes being built at 6,107, followed by Cork with 3,770 and Meath with 2,192. Meanwhile, 37,128 new addresses were added over the previous 12 months.
These figures suggest that housing construction is moving in the right direction.
However, we need to make one very important distinction clear: A building under construction is not yet a completed home. Likewise, a new address is not necessarily the same thing as a newly completed house. An apartment development, for example, can create many individual addresses.
- These figures are therefore encouraging signs of future supply, rather than proof that tens of thousands of additional homes are already available to buyers.
2. Derelict Homes Are Also Returning to Use
In that same report, a total of 19,137 properties were listed as derelict, which is down 3.5% compared with the previous year.
The main thing to note here is that new construction isn’t the only way to increase the number of homes available. Returning an existing derelict property to use can also increase Ireland’s usable housing stock.
So a strong housing strategy may therefore need to do both: build new homes while bringing suitable existing properties back into use.
3. Ireland Still Has More Than 81,000 Vacant Homes
GeoDirectory recorded 81,373 vacant residential units, with the national vacancy rate remaining at 3.7%.
At first glance, 81,000 vacant properties during a housing crisis sounds extraordinary. And even more so when Ireland is suffering from chronic undersupply.
But after looking further into this, vacancy in this case requires some context.
A property can be empty because it is being renovated, sold, inherited or prepared for its next occupant. A functioning housing market therefore needs some vacant homes. (Even with that context though, I still think 80k vacant homes is still an absurd figure).
In fact, it appears that having almost no vacant homes can also create its own problems.
For example, GeoDirectory CEO Dara Keogh explained that very tight vacancy can contribute to rising house prices because there are fewer properties available when people need them.
So the objective shouldn’t necessarily be zero vacancy, but rather, how many properties are unnecessarily vacant for long periods, and how many could realistically become homes again?
4. There Is Also an East-West Divide
The national vacancy figure hides enormous differences between counties.
While Dublin recorded a vacancy rate of just 1.4%, Leitrim’s was 11.5%, Mayo stood at 10.3% and Roscommon at 9.9%.
What this illustrates is that we don’t just have a shortage of homes, we also have a location problem. Having vacant properties in Leitrim doesn’t automatically solve a housing shortage that exists in Dublin.
Dublin’s housing needs will clearly be more urgent as people typically gravitate towards cities with higher living standards and working opportunities. Jobs, transport, education, healthcare and people’s family circumstances influence where housing demand exists.
Regional development, employment and infrastructure therefore form part of the housing discussion too.
5. The Difficult Number: €437,631
Despite the positive construction figures, the average national house price reached €437,631 in May 2026, according to GeoDirectory. That was 4.7% higher than a year earlier.
Dublin’s average house price alone reached €596,997.
So while construction activity is increasing and vacancy is declining, homes are still becoming more expensive. This unfortunately continues to suggest that while there may be an increase in the supply of homes, household incomes are not catching up and so real affordability continues to get worse.
6. Will Private Developers Eventually Make Housing More Affordable?
I mean, Wouldn’t that be nice if things were that simple? Unfortunately, we all know that it’s highly unlikely at this time, as demand continues to be far higher than supply.
There is a reasonable argument that private developers have little incentive to voluntarily reduce prices.
If a developer can sell a house for €400,000, why sell it for €350,000?
Competition matters.
Private supply can therefore improve affordability if enough homes can be built to meet demand. But in order to even get close to that point, Ireland has to realistically build 60,000 homes a year for the next few years. Right now, Ireland can barely provide 30,000 completed homes each year due to various constraints.
A 28% increase in construction activity is encouraging, sure. Unfortunately, one promising year will not erase a shortage that has developed for over a decade.
7. There Is Also a Minimum Cost to Building a Home
Competition, as vital as it can be to help reduce house prices, cannot make a developer consistently sell homes for less than they cost to produce.
Typical Building costs include:
- Land
- Labour
- Construction materials
- Finance
- Infrastructure
- Planning
- Professional fees
- Taxes and charges etc
If those costs remain very high, there is a limit to how far additional competition can reduce prices. This means that Ireland’s affordability problem has at least three connected parts.
1. Supply – Are we building enough homes?
2. Cost – Can those homes be built more efficiently?
3. Household income – Are people’s wages increasing fast enough to afford them? (Almost all global metrics to this particular question clearly say NO)
Could Public Housing Delivery Add Another Source of Supply?
All of the above leads to one question worth considering.
If private construction is increasing, should Ireland simply allow current policies more time to work?
Maybe.
However, another possibility is allowing public housing delivery to grow alongside private development. Dublin City Council’s (DCC) recently announced €2.5 billion housing programme provides an interesting example. My Little Home.
Over the next 4 years, rather than simply buying completed homes from developers, DCC intends to commission thousands of social and affordable homes using private construction companies.
This is different from the typical dynamic where the local council is the largest buyer of completed homes. In this dynamic, the council becomes the client, while private companies remain the builders. This model has many potential benefits which I have discussed HERE.
But There Is an Important Risk of ‘Crowding Out‘
Now, as much as I would love the idea of the government being directly involved in building more houses, I have come to realise that more Government investment does not automatically mean more total homes.
For example. Suppose the State commissions another 10,000 homes to be built.
If those projects simply take existing builders, engineers, materials and land away from 10,000 private homes that would otherwise have been constructed, the increase in overall supply could be much smaller than expected.
This is what I mean by crowding out.
That in why in order for Ireland to meaningfully increase housing supply at scale, it needs to deal with its current limitations in capacity first
- More workers, infrastructure (transport, utilities, sewage etc), serviced land, planning capacity, modern construction methods and viable regional builders will definitely needed if public and private housing output are to increase together.
What Should Ireland Consider Doing Next?
Ireland appears to be moving in the right direction on housing construction. The challenge now is turning increased activity into sustained improvements in supply and, eventually, affordability.
That leaves several questions worth considering.
- If private housing construction is finally gathering momentum, should Ireland give existing policies more time to work?
- Could additional publicly commissioned housing complement that progress without displacing private construction?
- Would additional public money (in the form of the 14billion Apple Tax Windfall ) be more effective if spent directly on homes, infrastructure, construction capacity, serviced land and other barriers preventing builders from delivering more homes? Instead of sitting unused in the National Developmen Plan?
And perhaps most importantly:
What should success ultimately look like?
More homes being built?
Slower house-price growth?
Or a housing market where the incomes of ordinary households can finally begin to catch up with the cost of having a home?
