The Government will fall short of its own housing targets for the next three years in a row, according to a new forecast from the Central Bank.
A warning that the years ahead will feature economic uncertainty due to President Donald Trump’s tariffs is included in the Central Bank’s first quarterly bulletin for the year. In the report, the Central Bank has reduced its forecast for economic growth for 2025 due to growing uncertainty as a result of the trade war between the US and Europe. It predicts that Ireland’s economy will grow by 2.7 per cent – 0.5 per cent lower than its last forecast.
It adds that due to a fall in residential construction last year, fewer homes will be built domestically over the next two years than it had previously forecast.
Last year, the bank said that there would need to be 70,000 homes built annually in Ireland over the next decade in line with population growth and in order to meet the housing shortfall. However, in 2024, just over 30,000 houses and apartments were built.
The Bank’s experts predict that housing completions for the next three years will be significantly lower than the government’s own targets. The State’s target for 2025 is for 41,000 new homes, followed by 43,000 in 2026 and 48,000 in 2027.
However, the Bank predicts that there will be 35,000 houses and apartments built this year, rising to 40,000 next year and 44,000 in 2027. The government’s pwn targets were detailed in a briefing document which was handed to newly appointed Minister for Housing, James Browne. The targets in the Minister’s briefing were based on decisions made by the last government alongside the commitment made in the Programme for Government to deliver 300,000 homes between 2025 and 2030.
If the Central Bank’s prediction is accurate, the Government would miss their housing targets for the next three years.
In the economic bulletin, the Central Bank said: “Several factors are restraining housing supply including low productivity in the construction sector, delays in utility connection, delays in planning system and a shortage of zoned and serviced land in high-demand areas.”
While the Bank said that the Irish economy is continuing to perform well, it added: “Risks to the growth outlook remain firmly on the downside as the risk of more pronounced global tensions have risen.”
“As a small open economy with extensive trade and foreign direct investment linkages with the US, the Irish economy, public finances and labour market are highly exposed to changes in US economic policy and any broader deterioration in the global trading environment,” it said.
On tariffs threatened by the US, the Bank predicts that some €15 billion of corporation tax receipts collected from multinationals could be “at risk.” This could lead to a “fiscal shock” which could impact the public finances and result in changes to Government spending and taxation.