Last year’s boost to new housing starts needs to continue if the Republic is to tackle its chronic housing crisis, experts warn.
Multinational consulting engineers Aecom calculate that work had started on 54,574 new homes in the first 11 months of 2024, echoing other estimates of high levels of housing starts last year.
However, the firm says that if the industry is to target of 50,500 new homes for 2025 and the years ahead “this acceleration in commencements will need to continue”.
Builders began work on large numbers of new homes in the closing months of last year to qualify for a waiver in development levies paid to local councils.
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Work had to begin by the end of 2024 to qualify for the waiver, one of several incentives offered by government to speed up work on housing in its latest efforts to tackle a decade-old shortage.
Aecom notes in a report published on Thursday that the last government earmarked a record €6 billion to spend on housing this year.
The firm argues that the private sector needs to match the State’s investment to meet demand for housing, but it points out that this has not been the case so far.
“The viability of private residential schemes is deeply challenging at present,” it says.
“Inadequate supply of housing stock and supporting infrastructure – water, energy and transport – is the single biggest issue facing the market.”
Aecom dubs this a “significant roadblock” to turning existing planning permission for housing into new homes, in its Ireland Annual Review 2025, due to be published on Thursday.
The engineering firm highlights that high rent and living costs leave many unable to save for deposits to buy homes.
“In response, the Government has introduced schemes to try to bridge the cap, but this remains a persistent challenge in the Republic of Ireland housing market,” says the firm.
In general, Aecom believes that the building industry will grow this year as the economy remains strong.
But it cautions that the Republic is sensitive to global economic shifts and uncertainties that could hit overall trade.
John O’Regan, Aecom’s director and country leader for the Republic, argued that meeting government targets required a co-ordinated approach “to ensure that housing, transport, water and energy systems” develop together.
He added that the Republic had a unique opportunity to address its housing challenges.
In Northern Ireland, Aecom says housing bucked the overall positive trend last year, blaming underspending on the infrastructure needed to support homes for the slowdown.
“Ageing drainage and wastewater infrastructure are the biggest bottlenecks,” it says.
The resulting shortage of homes boosted property prices by 6.4 per cent in the 12 months to the second quarter of last year in the North, the report notes.
It adds that tackling infrastructure problems could unlock the housing market.
The restoration of the Northern Ireland Executive and the release of long-term ambitious state funding for the region has made the region more attractive to investors and the end of political stalemate leaves the region free to plan ahead.
Building in the North enjoyed a strong year in 2024, growing 10.5 per cent. “This growth is linked to the stability in the industry and the wider economy across the island,” says Aecom.
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