Building a home in Ireland now takes twice as long as it did a decade ago – four years instead of two – because of the State’s dysfunctional planning system, according to the Central Bank.
In its latest quarterly bulletin, the bank revised down its forecasts for new home completions for this year and next on the back of a slowdown in housing commencements.
Another factor driving the downward revision was slower delivery times.
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“The homes that are built now take longer to arrive,” the bank said. “For homes completed so far in 2026, the average duration from lodgment of planning application to completion was four years, twice as long as a decade ago.
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“These increasing durations matter for the outlook of near-term housing completions. With such prolonged delivery times, homes completed over the next two to three years will come mainly from units already in the pipeline.”
In its report, the bank carried out a special analysis on housing delivery times.
It found that the median (or middle) council decision time for non-appealed schemes and apartments rose by over a month to around 4½ months between 2017 and this year. It noted that the share of decisions taking more than four months had risen from around one fifth to 56 per cent.
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While noting there has been a welcome rise in residential construction activity, with housing completions more than doubling between 2017 and last year, the Central Bank said it was revising down its forecasts for completions out to 2028.
It now expects completions to total 39,500, 41,000 and 45,000 for 2026, 2027 and 2028 respectively, down from 40,000, 42,000 and 46,000 previously.
“While there have been over 100,000 commencements since 2024, the timing around housing and apartment delivery suggests that without further improvements in commencements and building time, current projections may be difficult to meet,” it said.
In its latest economic assessment, the Central Bank upgraded its growth forecasts for the Irish economy on the back of “resilient consumer spending” and further multinational investment.
Despite the geopolitical turmoil, the domestic economy, as measured by modified domestic demand, is expected to grow by 3.8 per cent this year and at an average of 3.5 per cent out to 2028.
“Even with higher inflation, consumer spending continues to grow steadily,” it said. The positive outlook for consumer spending is supported by a recent revision to aggregate savings, which was €14.4 billion (60 per cent) higher than originally estimated in 2025.
This lifted the households’ savings ratio here from 12.9 per cent to 19.9 per cent, the highest in the euro area.
Ongoing conflict in the Middle East continues, however, to aggravate global energy prices, the bank warned.
Headline inflation would remain elevated, it said, averaging 3.4 per cent this year and 3.1 per cent in 2027.
In a severe scenario where oil and gas prices rise sharply above the bank’s baseline and remain persistently elevated out to 2028, inflation could accelerate above 5 per cent next year, exerting downward pressure on consumer spending and growth.
While employment recovered in the second quarter, growth for 2026 as a whole is projected to remain below rates observed in recent years.
It also noted that net inward migration would “remain a key source of labour supply in the coming years”.
The bank warned that there was little justification for “broad” cost-of-living supports in the upcoming budget, saying the Government should adhere to the expenditure ceilings outlined in the Summer Economic Statement.
