In April 2024, Ireland saw a record 17,600 new home commencement notices, six times higher than the previous year's monthly average of 3,000. This rise, driven by a temporary government waiver on a builder's levy worth EUR 20,000 per home, highlights efforts to tackle the housing crisis. Despite reaching a 15-year high of 33,000 new home completions in 2023, an estimated 50,000 units are needed annually. Analysts caution that not all applications will result in completed homes, emphasizing the importance of actual construction to address the shortage and meet the growing demand driven by a strong economy and population.
Ireland's housing crisis saw a change, with a record number of applications for new homes being filed. In April 2024, builders submitted 17,600 commencement notices, a figure six times higher than the average monthly applications of the previous year (around 3,000).
For years, access to affordable housing has been a major concern in Ireland. A severe shortage has driven rents to record highs, while house prices continue to rise despite increasing borrowing costs. While new home completions reached a 15-year high of nearly 33,000 units in 2023, experts estimate that closer to 50,000 homes are needed annually to meet the growing demand fuelled by a strong economy and population. This gap of around 17,000 units per year highlights the urgency of the situation.
The recent rise in applications is likely due to the government's extension of a waiver on a levy paid by builders to local authorities. This temporary relief measure, valued at an estimated EUR 20,000 per home, was implemented to incentivize construction and is scheduled to last until the end of 2024. Analysts believe the high number of applications reflects builders rushing to take advantage of the significant cost savings offered by the waiver before it expires.
While the increase in applications (totaling 52,500 for the 12 months ending April 2024) is encouraging, experts caution against overly optimistic interpretations. Goodbody, a leading financial services firm, expressed scepticism about all applications translating into completed homes. They point out that there was minimal downside for builders to submit applications, and the key question remains: how many of these projects, spread across housing schemes (25,000 units), apartments (22,000 units), and one-off units (6,000 units), will actually be built?
The extended time frame for completion mandated by the waiver program (homes need to be finished by the end of 2026) could further lengthen the gap between applications and completed units. While the recent surge is a positive development, it's crucial to monitor the actual number of homes constructed in the coming years. Addressing Ireland's housing crisis will require sustained efforts from builders, the government, and a focus on translating applications into completed, affordable homes to meet the annual demand of around 50,000 units.
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