Lapsing incentives which were designed to stimulate house building activity have “reduced the accuracy” of housing commencement notices – 60,000 of which were filed in 2024 – as a metric for the delivery of homes, the Department of Finance has said.
In a monthly housing update published on Wednesday, it noted the 60,000 commencement notices filed last year represented an increase of 84 per cent on 2023, “and the highest number since the series began in 2014”.
Commencement notices are papers filed by developers to signal their intent to commence construction.
Although “very positive,” the department warned that the expiration of the development levy waiver and the Uisce Éireann water connection rebate has “reduced the accuracy of this metric as a guide to delivery”.
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The schemes were introduced in 2023 to stimulate the building of new housing developments and were due to lapse last April.
The waiver was subsequently extended until the end of December last year, while the water connection rebate was extended until October.
Last month, then-minister for housing Darragh O’Brien said the 60,000 commencement notices “confirm that a robust stock of new housing is in the pipeline”, and hailed the development levy waiver and the Úisce Éireann rebate for the rise in such notices.
To benefit from the schemes, developers must complete projects by the end of 2026.
“However, as the cost of submitting a notice is negligible, and there is no penalty for non-commencement – it is uncertain how increased notices will actually translate to completions in the short to medium term,” the Department of Finance update reads.
Separately, noting that 30,330 new homes were completed last year, 6.7 per cent lower than 2023 and 9.3 per cent lower than target, this was largely driven by a “large drop” in apartment completions.
In the last quarter of 2024, 2,580 apartments were delivered, a decrease of 35 per cent on the same quarter in 2023.
“The retrenchment of institutional investment in the private rental sector (PRS) over recent years is now being borne out in the completions figures.
“It will be very difficult to meet official supply targets without a significant increase in such investment,” it said.
In Dublin, 10,892 new houses and apartments were completed in 2024, 13.5 per cent lower than in 2023, while planning permissions for 25,511 new homes were granted in the first three quarters of last year, 15 per cent lower than the same period in 2023.
Rising property prices, meanwhile, “continue to reflect a structural shortage of supply,” it said.
Nationally, the price of apartments increased by 7.5 per cent on an annual basis while the price of houses increased by 9.7 per cent.
Falling mortgage rates, the department said, are “increasing purchasing power for buyers.”
“While materials inflation remains modest; falling interest rates, income growth, and the potential for further demand-side measures all represent an upside risk for house prices,” the update reads.
