Would the Government trade some of its impressive GDP (gross domestic product) performance for a more pronounced rise in new home completions? In a heartbeat.
Two big economic indicators were published by the Central Statistics Office on Thursday. One is politically charged as it relates to the State’s principal challenge, housing.
The other will be dismissed as an aberration and filed in the leprechaun economics folder.
The Irish economy grew by 12.6 per cent in GDP terms last year, according to preliminary estimates. That will almost certainly make Ireland the fastest-growing economy in Europe and perhaps the world.
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But the traditional measure of economic growth has become so warped by multinationals that it bears little relation to actual economic conditions on the ground.
The bulge in 2025 was down to the front-loading of exports into the US to avoid tariffs, something that will unwind next year, resulting in much lower GDP growth. It’s merely statistical noise triggered by Washington’s on-off tariff announcements.
GDP fell by 0.6 per cent in the final quarter of 2025 “as these export patterns normalised”, AIB chief economist David McNamara noted.
The more significant of the two statistical measures, new home completions, came in at 36,284 for 2025, which was up 20 per cent on the previous year and ahead of expectations.
The Central Bank and the Economic and Social Research Institute had forecast 33,000-35,000, so the Government will take positives from that.
But its new housing plan targets a minimum of 300,000 new homes by 2030 and that will require annual output to increase to above 50,000 units a year, a level we haven’t reached since the heady Celtic Tiger years.
Getting homebuilding to that level will require another surge in institutional investment, which had stalled in 2023 and 2024 on the back of higher interest rates.
Government policy in recent months has been focused on enticing private rental sector investors back into the market.
It has overhauled the rental rules, changed apartment design standards and lowered the VAT rate on new-build apartments, while also streamlining the planning system.
[ Economy grows by almost 13% in GDP terms last yearOpens in new window ]
These changes already seem to be bearing fruit: the number of apartments completed in 2025 was 12,047, up 39 per cent from 2024. Housing starts, an indicator of future supply, rose to more than 3,000 in December, twice the November total.
But meeting the target of 300,000 by 2030 will require a sea change in what we’ve seen to date. It is something the Coalition has staked its reputation on.
Kate English, chief economist at Deloitte, said the first six months of 2026 would be pivotal, suggesting that at least 20,000 new homes need to be completed by the end of June for the Government’s medium-term targets to remain credible.
“If we don’t see an improvement in the first half of 2026, then it’s certain that 2026 will be another year of missed Government targets. We need to see a rise in both housing commencements and completions figures if there is to be any confidence from people in Ireland,” she said.
