'Radical reset' of housing policy needed as targets to be missed by 10,000 AGAIN
Officials in the Department of Housing have warned Minister James Browne that the number of new homes built this year is likely to fall 'somewhere in the low 30,000s', compared to a target of 41,000.
Internal briefing documents prepared for the Housing Minister, obtained by Extra.ie under Freedom of Information legislation, also raised concerns over the construction of desperately needed homes into the future.
Fianna Fáil and Fine Gael were accused of having 'misled' voters in the run up to last November's election, when they claimed 40,000 homes would be built last year but only 30,300 were delivered. 18/02/2025 Dublin Ireland. Fianna Fail Minister for Housing James Browne talking to the media on his way into today's cabinet meeting at Government Buildings. Photo: Sasko Lazarov/© RollingNews.ie
In a statement to Extra, Mr Browne admitted this year's output will fall far short of target.
He said it was 'difficult to see a pathway off the lower than expected base from 2024'.
The Fianna Fáil TD insisted he is 'interrogating every area' that is delaying delivery of housing and 'demanding faster outcomes as soon as possible'.
Ahead of the last election, the Government revised its housing targets upwards to account for Ireland's soaring population.
Over the course of this Government's lifetime, the aim is to build 303,000 new homes – starting at 41,000 this year and ramping up to 60,000 by 2030.
But there is already open admission within Government that their targets for 41,000 new homes this year and 43,000 next year will be widely missed, as the upward momentum in housing has evaporated.
The documents prepared for the minister highlight the 'almost complete retrenchment of private international capital since 2022' as a 'significant factor' that will affect the delivery of housing in the coming years. Housing Development: Pic: Getty Images
Institutional investors play a central role in the development of apartments and the 80% reduction in international capital since 2022 has led to a sizeable reduction in supply.
The officials highlight that the pipeline for new apartments is slowing, with a 39% dip in planning permissions in 2024 'reflecting a general downward trend from the peak in 2020 and 2021'.
This is already being felt in apartment completions which equated to 29% of all home completions in 2024, a drop of 7% from the previous year.
The officials wrote: 'Delivery of apartments will be potentially constrained in coming years given the fall in institutional investment since mid-2022, and its slow return to date.'
This depleted pipeline has placed the Government's housing targets beyond 2026 at risk, officials warned.
They stated: 'The decline in overall approvals, as well as apartment approvals, has implications in the longer term for the delivery of Government's revised housing targets, with approvals falling short of the quantum needed to hit targets in 2026 and subsequent years.'
Mr Browne said recently that he felt the Economic Social and Research Institute's prediction that 34,000 new homes would be built this year and 37,000 next year is probably broadly accurate. The internal documents prepared for Mr Browne by his officials in April state that an output in the low 30,000s this year is likely.
They wrote: 'Published forecasts project between 32,000 and 35,000 new homes will be completed in 2025 – the forecasts will fluctuate as the year progresses, but somewhere in the low 30,000 range seems most realistic at this stage factoring in early feedback from the construction sector.' Minister for Housing, Local Government and Heritage James Browne TD speaking to the media in the Government Press Center following today's Cabinet meeting, Dublin. Photo: Sam Boal/Collins Photos
The officials noted that while 'the emerging consensus from published forecasts' at the start of 2025 is between 32,000 and 35,000 new homes this year 'all forecasts should be treated with considerable caution at this stage'.
They stated: 'A degree of circumspection is advised as a more conservative projection of 30,000, give or take, is mooted by stakeholders closer to residential construction sector.'
Mr Browne said: 'I am seeing many of the same forecasts as are publicly available and most of them have the same trajectory for the year, which is in the low 30s, which seems realistic at this stage in the year – it would be difficult to see a pathway off the lower than expected base from 2024.'
He said that he is 'interrogating every area' that is delaying delivery of housing and 'demanding faster outcomes as soon as possible'.
Mr Browne added: 'I've been pulling together what's needed to boost delivery, including a revised National Planning Framework which will help increase our capacity and accelerate home building. The Housing Activation Office will hone in on the ground to address barriers impacting housing development.
'The buttons I press now may not feel like they have immediate impact but what I do now will impact home building for years and we have to get it right. I'm serious about that. Sorting out planning can be laboured – it is a rules-based process for many good reasons. That doesn't mean we aren't tackling it to speed it up.
'Measures to help scale-up delivery are being considered in the context of the next housing plan.'
The officials pointed to planning permissions for 49,212 units that have not commenced in Dublin as one potential solution over the medium term. Of those, 7,272 are on sites where construction had started while 5,875 are being held up as they are the subject of a judicial review.
Last week, Mr Browne announced plans to allow for the extension of planning permissions for developments that are set to expire and have not yet commenced.
The permissions can be extended for up to three years. The proposals will also allow planning permissions subjected to or going through a judicial review to apply for a retrospective suspension of the permission for the duration of the judicial review. Pic: Sam Boal/Collins Photos
Sinn Féin's housing spokesman Eoin Ó Broin told Extra: 'The ESRI and Central Bank, in their recent presentation to the Oireachtas Housing Committee, said that without a significant change in policy and investment, the new Programme for Government targets can not be met.
'All of the indicators are going in the wrong direction.
'Only a radical reset of housing policy, as recommended by the Housing Commission and Sinn Féin can start to undo the damage of years of bad Fianna Fáil and Fine Gael housing policy.'
Mr Browne is set to unveil his new housing plan next month, prior to the Dáil's summer recess. Viability is a core challenge facing the sector, particularly in relation to apartments, with the Department of Finance in the process examining proposals to tackle funding challenges.
It is expected that changes to apartment regulations will be made in an attempt to reduce the cost of building. The documents highlight the surge in the price of materials, which are now 33% higher than in January 2021.
Officials wrote: 'Input cost inflation quickened for the second month running and was the steepest for almost two years.'
The CSO's Wholesale Price Index for building and construction materials shows material input costs continue to rise.
The Government has also been deciding on whether to retain, replace or amend the Rent Pressure Zones, which limit annual rent increases to 2%. It appears removing the 2% cap is now the plan.
RPZs have been highlighted as a barrier to investment by institutional investors. Uisce Éireann has also warned that it will need an additional €2billion to connect new homes to the supply if it is to keep pace with increased housing targets.
The housing officials pointed to issues in water and energy connections as one reason for the shortfall in completions last year as well as the Government's incentivising of commencing new developments.
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