The Central Bank has warned that achieving the Government’s target of delivering 300,000 new homes by the end of 2030 will remain difficult, pointing to ongoing constraints across the construction sector. While the bank has slightly upgraded its outlook for housing output, it remains cautious about the pace at which supply can increase.
According to its latest projections, residential construction is expected to reach around 33,000 homes this year, rising to 37,000 next year. Output is forecast to increase further to approximately 40,500 homes in 2027 and 44,500 in 2028. Even with this upward trend, the bank suggests that these levels underline how demanding the overall 2030 target remains.
The Central Bank highlighted persistent bottlenecks in housing supply alongside elevated construction costs. These pressures, it warned, are likely to continue feeding into higher rents and housing-related inflation. In turn, this may place further upward pressure on wages and broader goods and services prices, with knock-on effects across the wider economy.
In its economic outlook, the bank expects growth in the Irish economy to slow next year, alongside higher inflation than seen recently. Domestic economic growth is forecast at 4% this year, followed by average growth of 2.9% between 2026 and 2028. The bank also noted that the strong expansion in employment and incomes seen since 2021 is easing, which is expected to result in more moderate growth in consumer spending.
Employment growth is projected to soften, with the number of people in work rising by under 2% annually over the coming years. The unemployment rate is expected to average around 5%, while inflation is forecast to average 2% up to 2028.
Commenting on the outlook, Robert Kelly, Director of Statistics at the Central Bank, said that the Irish economy has shown resilience throughout 2025 despite significant challenges. He noted that multinational exporters are adapting to changes in the global trade and investment environment, with the adjustment to date proving manageable for Ireland. However, he added that indicators of domestic activity are more mixed, pointing towards a slower pace of growth and ongoing inflationary pressures.
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