The pace of construction of new residential homes in Ireland continues to accelerate according to the latest forecasts from EY-Euroconstruct, with estimates for completions revised upwards to 36,000 this year and to 41,000 for 2025. Housing completions per 1,000 of the population in Ireland – at 6.9 in 2024 and 7.7 in 2025 – are projected to be the strongest among the 19 Euroconstruct European countries and more than double the overall average (3.3 per 1,000 in 2024 and 3.1 in 2025).
Total Irish construction output, including non-residential and civil engineering, is forecast to grow by 3.9% in 2024, the highest in the Euroconstruct area, and 5.7% in 2025. The volume of new non-residential building (including retail, office and industrial buildings, student accommodation and hospitality) is expected to break even in 2024 before recovering modestly in 2025 (up 1.3%).
At a European level, the contraction in construction activity is set to continue in 2024, with the consensus forecast across the 19 Euroconstruct countries of an overall reduction of 2.7% this year, mainly caused by significant challenges in the new residential sector in 15 of 19 Euroconstruct countries. The problems of recent years (eg, higher interest rates, although now beginning to turn, inflation, and rise in construction costs) will continue to weigh on building construction, while civil engineering is expected to expand strongly in 2024. The expansion in civil engineering is driven by a variety of investment needs but, above all, by the financial backing of governments.
The Euroconstruct network is projecting a return to total construction growth in 2025, albeit a modest 1.3%, as the interest rate cycle turns and inflationary pressures ease, with the positive trend continuing in 2026.
EY Ireland is the Irish member of the Euroconstruct network, an independent construction market forecasting network active in 19 European countries. The 19 country partners of the Euroconstruct network analyse factors influencing the three principal segments of construction – residential, non-residential (eg, office, industrial, hospitals and schools) and civil engineering (eg, transport, energy and water infrastructure) and provide up to date projections for each segment to 2026.
Annette Hughes, Director at EY Economic Advisory and member of Euroconstruct, says: “New residential construction activity continues to expand in Ireland, and we are revising up our forecasts for housing completions for 2024 to 36,000. We are also forecasting that supply will increase further in 2025 to 41,000, which would be the highest number of completions since 2008. This pace of new housing growth in Ireland, the fastest in Europe when measured on a per-population basis, is a significant outlier compared to the European average as assessed by Euroconstruct members, where supply is projected to contract in 2024 and 2025.
“This expansion in the delivery of new homes in Ireland is very welcome and has been driven by a range of factors. These factors include multiple policy interventions to speed up the delivery of new homes and drive down the cost of construction, particularly for the delivery of affordable and cost-rental housing. The reallocation of some capacity in the sector from commercial to residential construction is also impacting. The impact of these interventions can take time to feed through the system, so much of the new housing that we are forecasting to complete in 2024 is a result of measures from some time ago. To this point, the extension of temporary waivers, which have spurred a significant increase in commencements notices in recent months, is expected to result in the highest level of completions since 2008 next year.
“For the wider Irish construction sector, the picture is more mixed. Civil engineering continues to perform well. However, non-residential construction is flat at best, hampered by the reduction in commercial activity and the reallocation of capacity into the more vibrant residential sector.