Housing Targets Missed: Can Ireland Solve its Housing Crisis?
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The annual commemoration of Michael Collins’ assassination is a poignant reminder of ireland’s complex past. This year, however, the event took on a new significance, casting a shadow over the government’s promises on a pressing issue: the housing crisis.
Last August, as the country prepared for a general election, taoiseach at the time, Simon Harris, addressed a crowd at Béal na Bláth, Co Cork. He passionately advocated for tackling the housing crisis, stating, “I want to solve this national malaise now, before it becomes their problem,” echoing the concerns of many parents facing the realities of skyrocketing housing costs.
Harris boldly predicted, “This year, we will exceed our housing targets with almost 40,000 homes built.” This pledge came just days after then-Housing Minister Darragh O’Brien wrote to Harris, claiming self-reliant analysts indicated that “we are on track to exceed our housing targets for 2024 and I estimate we will approach 40,000 housing units in 2024.”
These assurances looked optimistic, particularly considering the previous government’s ‘Housing for All’ plan, aiming for 33,450 homes to be built in 2024.However, those hopes were dashed when figures released by the Central Statistics Office in January revealed a stark reality: only 30,330 homes were completed last year – a disappointing 2,195 fewer than the target.
Forewarnings of this shortfall had emerged months before. In september, the Central Bank predicted fewer homes would be built in 2024 compared to 2023.This bleak outlook was further confirmed in October when the CSO revealed that house completions lagged behind the previous year, reaching 21,634 compared to 22,325 in 2023.
Despite these concerns, O’Brien remained confident, stating in the Dáil, “The target this year under ‘housing for All’ is 33,450. I have consistently said we will exceed that target.I still confidently predict - the Deputy and his colleagues in sinn Féin will be disappointed - that it will be the high 30,000s to low 40,000s this year.”
However, this bullish prediction rang hollow after the election results, where housing emerged as a key issue. The new Housing Minister, James Browne, acknowledged the figures for 2024 as “disappointing.” Sinn Féin’s Housing Spokesman Eoin Ó Broin went further, accusing the former government of “clearly and deliberately misled the electorate in the run-up to november’s General Election.”
The focus now shifts to 2025. Construction consultancy Mitchell McDermott paints a concerning picture, forecasting only 32,000 homes will be built this year, warning of a “stagnant” housing market. This projection poses a important challenge to the new coalition government’s enterprising target of 300,000 homes over the next five years, effectively requiring 60,000 homes per year.
Mitchell McDermott emphasizes the need for “drastic measures” if this ambitious target is to be met. A key concern highlighted is the 24% drop in apartment completions in 2024, directly contributing to the overall decline in new homes. This trend is projected to continue, with just 14,000 planning permissions for apartments granted last year, compared to 21,000 in the previous year.Mitchell McDermott attributes this downturn to government policies that have discouraged international investment in residential construction.
Specifically, the firm points to the December 2022 changes that removed “build to rent” as a planning category and similar modifications that effectively banned “co-living.” They also allege that the introduction of rent caps, implemented in a manner deemed detrimental by international investors, pushed many to seek opportunities elsewhere.
The previous administration faced harsh criticism from the opposition over its emphasis on large apartment blocks built for high rental prices. It comes as no surprise, given the context of housing as a central issue during the last election, with opposition parties even demanding a complete freeze on rents. Now, Browne faces a tough task indeed. The new government is starting from an already challenging position, where trust in housing promises need to be rebuilt.The resurgent housing crisis in Ireland demands urgent attention.
What are the government’s proposed solutions to the housing crisis?
Housing Targets Missed: Can Ireland Solve its Housing crisis?
The annual commemoration of Michael Collins’ assassination is a poignant reminder of Ireland’s complex past. This year, though, the event took on a new meaning, casting a shadow over the government’s promises on a pressing issue: the housing crisis. Last August, as the country prepared for a general election, taoiseach at the time, Simon Harris, addressed a crowd at Béal na Bláth, Co Cork.He passionately advocated for tackling the housing crisis, stating, “I want to solve this national malaise now, before it becomes their problem,” echoing the concerns of many parents facing the realities of skyrocketing housing costs.
Harris boldly predicted, “This year, we will exceed our housing targets with almost 40,000 homes built.” This pledge came just days after then-housing Minister Darragh O’Brien wrote to Harris, claiming self-reliant analysts indicated that “we are on track to exceed our housing targets for 2024 and I estimate we will approach 40,000 housing units in 2024.”
These assurances looked optimistic, particularly considering the previous government’s ‘Housing for All’ plan, aiming for 33,450 homes to be built in 2024. However, those hopes were dashed when figures released by the Central Statistics Office in January revealed a stark reality: only 30,330 homes were completed last year – a disappointing 2,195 fewer than the target.
Forewarnings of this shortfall had emerged months before. In September, the Central Bank predicted fewer homes would be built in 2024 compared to 2023. This bleak outlook was further confirmed in October when the CSO revealed that house completions lagged behind the previous year, reaching 21,634 compared to 22,325 in 2023.
Interview with construction Expert
Archyde: Ronan Walsh,you’re a leading analyst of the Irish construction industry. With the government missing its housing targets for the second year running, what’s your prognosis for the irish housing market?
Ronan Walsh: The current situation is concerning. While the administration periodically expresses confidence in exceeding targets, reality paints a different picture. As things stand, we’re facing an ongoing mismatch between supply and demand. This lack of progress will continue to fuel price inflation and rental crises, ultimately making homeownership a distant dream for many.
archyde: What factors, in your view, are contributing most significantly to this shortfall in housing completions?
Ronan Walsh: It’s a complex issue with multiple contributing factors. Planning complexities, lengthy approval processes, a shortage of skilled labor, and rising construction costs all play a role.However, I believe government policy decisions have also had a important impact.
The recent changes to planning regulations,particularly the removal of “build to rent” as a category and the limitations on “co-living”,have significantly hampered foreign investment in residential construction. This is particularly disheartening, as Ireland sorely needs increased investment to alleviate the crisis.
Archyde: What solutions do you propose to bridge the gap and achieve the government’s enterprising targets of building 300,000 homes over the next five years?
Ronan Walsh: Drastic measures are needed. Streamlining planning processes, incentivizing domestic and international investment, and addressing the skills shortage within the construction sector are all crucial steps. The government must also revisit its recent policy changes that have discouraged certain types of housing advancement, particularly those designed to cater to the rental market. A more nuanced approach, focused on promoting diverse housing options, is essential.
Archyde: looking ahead, what are your thoughts on the long-term viability of achieving a lasting and affordable housing market in Ireland?
Ronan Walsh: The situation is dire, but not insurmountable. Building a sustainable and affordable housing market will require a long-term commitment from both the government and the private sector. We need a multi-faceted approach encompassing policy reform, financial incentives, and a shift in societal attitudes towards housing ownership and rental options. The success ultimately hinges on political will and a genuine desire to address this critical issue.
