Banks see no sign of imminent spike in housebuilding

Irish Times

20-05-2025

Senior Irish bankers said on Tuesday they are not seeing signs of an imminent surge in housebuilding, adding to fears that the
Government will miss its housing targets
for at least this year and next.
Bank of Ireland's head of corporate and commercial banking, John Feeney, told a
Banking and Payments Federation Ireland
(BPFI) conference that his organisation's ongoing conversations with construction industry customers does not point to an imminent spike in activity.
'We're not on track to get up to the larger numbers that have been mooted,' he said.
Cathy Bryce, managing director of AIB's capital markets division, said activity remains particularly quiet in the private rental development sector. 'In the very short term we are not seeing anything in the way of private rental schemes coming through,' she said.
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The Government has set itself a target of delivering 41,000 this year and 43,000 in 2026 – a total of 84,000.
It is aiming for 300,000 homes to be built by the end of the decade. However, the Central Bank and BPFI estimate that 75,000 homes will be completed over the two years.
Pat Farrell, head of the Irish Institutional Property lobby group, said he estimates that 30,000 or fewer homes will be developed this year, following a 6.7 per cent decline in 2024 to 30,330 dwellings.
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Home completions must 'accelerate significantly' if housing targets are to be met, department warns
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While speakers on the BPFI conference's panel discussion on housing – also including Land Development Agency (LDA) chief executive John Coleman – said the new Government is focused on upping activity, the industry remains constrained by slow planning and infrastructure bottlenecks.
An ongoing two per cent annual rent increase cap in rent pressure zones, which is currently being reviewed by the Government, and 'completely unpredictable and knee-jerk' property policies have hit apartment construction in recent years, according to Mr Farrell.
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Minister for Public Expenditure Jack Chambers last week chaired the first meeting of the new so-called accelerating infrastructure taskforce, which is aimed at unblocking barriers and accelerate infrastructure delivery.
His department has also set up a new infrastructure division, which includes figures redeployed from ESB Networks, EirGrid, Uisce Éireann, Transport Infrastructure Ireland and An Bord Pleanála, in an effort to 'improve the speed and efficiency of critical infrastructure delivery'.
'I'm seeing greater urgency,' said Mr Coleman. Still, he said that there needs to be a culture change in Ireland a 'not in my back yard' mentality that sees a lot of planning applications being object to, often ending up in court.
The senior Bank of Ireland and AIB bankers said that they have plenty of lending capacity to lend for home construction.
However, Ms Bryce said that smaller builders find it more difficult than the publicly-quoted players build up landbanks and have a steady stream of projects, because are more constrained on the equity-financing front.
Ms Bryce said that there is a need for consolidation among some of the smaller builders. 'If they could develop into plcs, we, as banks, can give them more flexible [lending] facilities,' she said.