Irish housing completions forecast to be strongest among 19 European countries: EY-Euroconstruct

• Irish housing completions per 1,000 of population the strongest among 19 European countries and more than double the Euroconstruct average
• New Irish housing completions forecast at 36,000 for 2024 and 41,000 in 2025
• Overall Irish construction output projected to grow by 3.9% in 2024 and 5.7% in 2025
• Total construction activity in the 19 Euroconstruct countries expected to contract by 2.7% in 2024, before recovering by 1.3% in 2025
  

Dublin, 11 June 2024: The pace of construction of new residential homes in Ireland is continuing to accelerate according to the latest forecasts from EY-Euroconstruct, with estimates for completions revised upwards to 36,000 for this year and to 41,000 for 2025. Housing completions per 1,000 of 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, which also includes 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 (e.g., higher interest rates, although now beginning to turn, inflation, 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 level of 1.3%, as the interest rate cycle turns and inflationary pressures ease, with the positive trend continuing in 2026.

That’s according to EY Ireland, the Irish member of the Euroconstruct network, an independent construction market forecasting network active in 19 European countries, which is holding its 97th conference in Stockholm, Sweden today (June 11th). The 19 country partners of the Euroconstruct network analyse factors influencing the three principal segments of construction - residential, non-residential (e.g., office, industrial, hospitals and schools) and civil engineering (e.g., 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 when compared to the European average as assessed by Euroconstruct members, where supply is projected to contract in both 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. This includes 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 having an impact. 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, are 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.

“While our forecast is positive for the Irish construction sector, keeping a lid on construction inflation, maintaining cost control and reallocating capacity in the sector towards growth areas will be key. In this context, a continued expansion of residential housebuilding, supported by an increase in the adoption of modern methods of construction to improve efficiency and delivery across the sector will be important. Policy settings that support the continued expansion of residential construction activity in particular will also be essential.”

More information on the projections from the 97th EUROCONSTRUCT conference in Stockholm and construction trends across the 19 country members of the Network to 2026 can be found in two reports from the Conference: “Summary Report” and “Country Report”. These reports can be purchased from the organiser of the conference or from your local EUROCONSTRUCT member www.euroconstruct.org.

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Note: *In December 2023, EY – Euroconstruct had forecasted 33,450 new housing completions in 2024, this has been now revised upwards to 36,000

Media contact: Barry Dunning, EY Ireland Head of External Communications | barry.dunning@ie.ey.com | 083 167 4871

Euroconstruct contact: Annette Hughes, Director at EY Economic Advisory and member of Euroconstruct Annette.Hughes@ie.ey.com

About Euroconstruct:

Euroconstruct is a research network specializing in construction market analysis and forecasting across Europe. Established in 1974, it comprises member institutes from 19 European countries; Austria, Belgium, Czechia, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, The Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, and the United Kingdom

The 19 country partners of the Euroconstruct network assess a total of 15 different influencing factors for the three main segments of construction - residential construction, non-residential construction and civil engineering twice a year. Individual factors are surveyed several times so that judgements are made on 7 standard influences per construction sector.