The number of homes under construction fell to its lowest level since lockdown in Q1 2021 following a surge last year triggered by the government's temporary development levy waiver.
The post-waiver slowdown suggests looming supply constraints, particularly outside of Dublin, according to CIS, powered by Hubexo.
The report also noted a moderation in planned residential investment and a steep fall in public infrastructure expenditure, raising red flags for long-term development momentum.
There were just 3,126 residential units started in Q1, down 95.6% from 71,227 a year prior and 90.6% from 33,548 in the first three months of 2023.
Additionally, construction commenced on 284 housing projects, an increase of 20% year-on-year compared to the 237 projects started during the same period last year.
Ultimately, the 284 housing projects will yield 11,000 homes, although they were not all commenced during the quarter.
Noteworthy developments include 688 units at Cairn Homes' €345m Montrose LRD in Dublin, 716 units at BAM's Castlelake SHD in Cork, and 376 units at the €140m Augustine Hill regeneration scheme in Galway.
Additionally, two new student accommodation projects got underway in Galway and Limerick which will create 459 new student beds.
Meanwhile, 264 housing developments comprising a total of 8,200 planned homes, including 3,600 apartments and 4,600 houses, were granted planning permission.
A majority of apartment developments remain Dublin-focused, while house planning was more regionally spread, including 1,200 units in Dublin, 760 in Meath, and 350 in Louth.
A further 773 student beds received planning approval.
Some 394 new non-residential projects worth €622m commenced in Q1, an increase of 3.5% year-on-year but down 30% quarter-on-quarter.
The projects under construction include a €42.5m office development by Irish Life in Dublin 2, the €43m extension to St. Colman's Hospital in Co. Wicklow, the €27.5m Premier Inn Hotel in Dublin 1, and new surgical hubs in Cork and Limerick costing over €37m combined.
On the pipeline side, 527 projects were granted planning permission, valued at €1.4bn — down 11.6% from Q4 2024 and 16.7% from Q1 2024.
They include €144m data halls in Finglas from Hunstown Power Company, the €77m extension of Cavan General Hospital, the €35m extension to the Europe Hotel in Killarney, a €40m warehousing facility in Cork, and a 22,000 sqm plasterboard plan in Kilkenny that is currently under appeal.
However, there has been an 85% annual drop in public infrastructure investment from €1.2bn to €184m, which CIS said risks hampering Ireland’s ability to deliver essential services and meet national development targets.
Also, the drop presents a critical bottleneck for projects related to housing delivery, transport, healthcare, education, and utilities.
“While new project starts in Q1 suggest continued resilience, the significant decline in planning activity and public infrastructure investment is a red flag," said Dave Thompson, VP Europe and Ireland for CIS.
“If we want to meet our national development targets, the pace of planning and public investment must catch up with market demand — particularly outside Dublin.”
(Pic: Getty Images)
