Pipeline concerns despite strong housing delivery

Completions reach highest level since 2009 but tight supply is turning starter homes into long term family homes.

Ireland’s housing market enters 2026 with strong delivery figures and resilient mortgage demand, yet a decline in new construction starts during 2025 is heightening concern about future supply and reshaping how households behave in an increasingly constrained market.

The latest Housing Market Monitor from Banking & Payments Federation Ireland shows that 36,284 homes were completed in 2025, more than 20% higher than the previous year and the strongest annual total since mid‑2009.

Almost 12,000 homes were finished in the final quarter, a rise of nearly 40% on the same period in 2024, driven in large part by a sharp increase in apartment output.

Pipeline concerns

Brian Hayes, chief executive of BPFI, said the figures underline a year of “very strong output” with apartment completions in Dublin rising by over 46% to more than 9,600 units. One‑off and self‑build properties represented just over 16% of national completions and accounted for at least 40% of output in nine counties.

However, the pipeline for future supply weakened significantly. Just over 16,000 new housing starts were recorded in 2025, a steep fall from more than 69,300 the previous year when developers rushed to begin projects before levy waivers expired. The most severe declines were in Dublin City, Fingal and South Dublin, where commencements dropped by almost 84%.

Hayes noted that units commenced in 2024 must be completed by the end of 2026 in order to qualify for the levy exemptions. This requirement could lift overall output to almost 39,000 units this year if building activity holds steady.

“However,” he said, “the low level of commencements in 2025, particularly for housing schemes and apartments at only 12,600 units, points to a likely reduction in output in 2027 unless commencements rebound significantly during 2026.”

The squeeze on supply is also reshaping household decisions. Sales of second‑hand homes fell for the third consecutive year to 38,502, the lowest level since 2020. Renovation activity has surged at the same time, with spending rising from €3.9 billion in 2019 to more than €7.5 billion in 2024. BPFI expects expenditure to have reached about €8 billion in 2025.

Mortgage market trends echo this shift. While total drawdowns rose 7.7% last year to 46,358, with first‑time buyers accounting for 60% of lending, mover‑purchaser activity continued to weaken. Households looking to trade up are finding fewer options available and many are opting instead to release equity in order to extend or upgrade their existing homes.

Trading places

This pattern is becoming increasingly visible to brokers. Martina Hennessy (pictured), chief executive of Doddl.ie, said the shortfall of larger homes coming on to the market is “freezing the traditional trade‑up market” and is reshaping how families think about future housing needs.

“With so few larger homes coming up for sale, many households who would normally move are instead choosing to renovate their existing property rather than compete in a very tight market,” she said. “Strong house price growth means many homeowners now have significant equity built up. Increasingly we are seeing people release that equity through switching or mortgage top‑ups to fund extensions or upgrades, effectively turning a starter home into their forever home.”

Hennessy said more than half of switcher applicants at doddl.ie are now releasing equity to improve their homes or consolidate existing home improvement loans. “Homeowners who refinance strategically can often fund renovations while also securing a lower mortgage rate,” she said. “Many people are realising they can release equity to improve their home and reduce mortgage repayments at the same time.”

Hayes said the market is entering 2026 in a broadly positive position, supported by solid completions and stable mortgage demand. He added that the sharp fall in commencements during 2025 presents a clear risk to future supply unless building activity recovers during the year.