Projections on housing completions are “not an exact science”, the Tánaiste has said, after the Central Bank predicted that the Government will miss its housing targets for the next three years.
The coalition wants to deliver 303,000 homes by the end of 2030, scaling up from 41,000 this year to 43,000 in 2026 and 48,000 in 2027.
However, the Central Bank’s first quarterly bulletin of 2025 projects that completions will hit just 35,000 this year, 40,000 in 2026, and 44,000 in 2027.
The projections for 2025-2027 would put the Government 13,000 homes behind its own targets by the end of 2027.
The remaining targets are 43,000 in 2028; 58,000 in 2029; and 60,000 in 2030.
The latest projections come after the Government was criticised for not heeding previous estimates from the Central Bank in the run-up to the General Election.
Senior coalition figures had claimed during the election campaign that close to 40,000 new homes would be built in 2024, which would have been far in excess of its own target of 33,450.
This was despite the Central Bank projecting in its September quarterly bulletin that completions would hit about 32,000.
In reality, data from the Central Statistics Office revealed that only 30,330 new homes were completed last year.
Government ministers defended not relying on the Central Bank projection during the election campaign, instead saying they were using estimates by Deutsche Bank and Cairn Homes.
The Tánaiste said the Government needs to look at “blockages” in housing delivery.
Simon Harris said: “There have been some years where the Central Bank have underestimated the number of homes that we delivered, in some years – I’m sure – where they’ve gotten it quite right, and perhaps other years where they’ve overestimated it.
“And the focus here has to be on the fact that we need 300,000 more homes over the next five years.
“I’m going to be very honest, I think we’ve gotten to a point where we now know how to deliver well over 30,000 – that’s good, it’s well up on where it was. It’s not enough.”
He added: “We’re going to need to look at further disruptive measures we can take. I’m very passionately of the view that that means a real focus on things like water infrastructure. As a Government, we want to provide a lot more money to Irish Water from the Apple fund.
“But there has to be a quid pro quo for that. I want to know that in return for the Irish taxpayer, Irish Government making a decision to provide lots of extra money to Irish Water, I want to know the cause and effect that’s going to have in terms of increasing housing supply.”
The Central Bank says low productivity in the construction sector, delays in utility connection and the planning system, and a shortage of zoned and service land in high-demand areas are restraining housing supply.
Although housing commencements rose by almost 69,000 units in 2024, there is uncertainty over the proportion of these commencements that are likely to result in completed dwellings in the period out to 2027.
Speaking before Cabinet on Wednesday, Taoiseach Micheál Martin said the Government will be “focusing” on how to surpass projections by the Central Bank.
“I think, generally, people feel we need about 50,000-a-year.
“However, there has not been as sufficient focus on what we get to 50,000 houses-a-year from where we are now, and that is why I articulated the need for more private sector investment in housing.
“And we need to create certainty in the investment environment to balance the huge State investment that is going into housing, and will continue to go into housing.
“But we will be focusing on trying to get those numbers up and surpass the figures that the Central Bank has predicted.”
Asked if Government will accept the projections, Mr Martin noted that the Central Bank had previously underestimated delivery.
However, he added: “Nonetheless, irrespective of the forecast, we need to be building more houses. There’s no issue and no argument about that.”
