House building declined in the first three months of 2025
The focus of activity in the construction industry seems to have moved towards non-residential building, with the volume index for civil engineering, for example, rising by 16.6pc.
Shane O'Sullivan of the CSO said: 'On an annual basis, between Q1 2024 and Q1 of this year, production volume in construction grew by 13.5pc. During the same period, in the non-residential building sector it rose by 13.7pc, and was up by 35.9pc in the civil engineering sector, while production volume in residential building showed an annual decrease, down 10.6pc.'
It is the latest disappointing set of figures for the Government, which prompted the Housing Minister, James Browne, to say on Thursday that the official target of building 41,000 new homes this year is 'not realistic'.
The Central Bank has downgraded its forecast for delivery to 32,500. This follows the publication of figures for completions in the first quarter by the CSO, showing they were only 2pc up on the same period in 2024, a year that finished with just over 30,000 units being completed.
Of even more concern was the 2.5pc decline in the number of homes that got planning permission in Q1, which stood at 8.177 units.
The Government has responded by introducing legislation to amend the Rent Pressure Zone system, bringing every current tenancy under an RPZ. It is also expanding the remit of the Land Development Agency, and the Tanaiste, Simon Harris, has said further, unspecified measures are going to be announced between now and the Dail recess in July.
Ian Lawlor, managing director of Roundtower Capital, said: 'While the volume of production in building and construction is up, the 4.3pc fall in house building activity is hugely disappointing and a further indication that the government is going to struggle to meet its housing targets this year.'
'While the rental reforms recently announced are certainly welcome, the jury is out as to just how effective they will be in stimulating housing supply,' he added. 'Other obstacles to increased supply that need to be tackled if the Government is to get more private investors on board include prohibitive development levies, VAT burdens, inadequate tax incentives, limited Public Private Partnership options, and insufficient state support for builders.'
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