Marian Finnegan, Chief Executive Officer, Sherry FitzGerald Group, shares her residential market outlook for 2026 and says there are signs of tangible market momentum emerging
Supply constraints have characterised the residential property market for several years.
These challenges intensified in recent times due to a range of impediments to delivery, including limited zoned land and supporting infrastructure, elevated construction and building costs, constrained access to finance, higher borrowing costs, and delays within the planning system.
In 2025, the Government introduced a series of policy initiatives aimed at addressing these structural issues and alleviating persistent supply shortages. Central to this was the publication of Delivering Homes, Building Communities 2025–2030, which established a target of delivering 300,000 new homes by 2030.
The establishment of the Housing Activation Office and the Accelerating Infrastructure Taskforce is intended to remove key bottlenecks and expedite housing delivery. Reforms to the rent pressure zone system, alongside additional measures designed to enhance the viability of apartment development, were also announced.
While the full impact of these reforms will take time to materialise, and further policy measures may be required to ensure their long-term effectiveness,
there are grounds for optimism.
We anticipate that tangible momentum will begin to emerge across the market over the coming year. Encouragingly, signs of improvement became evident towards the end of 2025. Following a subdued first quarter, new dwelling completions accelerated, with nearly 12,000 units delivered in Q4 alone.
As a result, total completions for the year exceeded expectations, reaching approximately 36,300 units – 20 per cent higher than 2024 levels. Commencement activity in 2025 was comparatively weak for much of the year, though this followed exceptionally elevated levels in 2024, influenced by the expiry of development levy and water connection rebate schemes.
When viewed over a two-year period, commencements in 2024 and 2025 averaged 42,860 units per annum, representing a marked improvement on historic trends. Although December recorded a strong uptick in commencements, exceeding 3,000 units, this eased to just over 2,000 units in January.
To meet underlying demand, monthly commencements would need to average approximately 4,700 units. Planning activity showed modest growth. In the first nine months of 2025, 26,766 residential units were granted planning permission, a 4.9 per cent increase compared with the same period in 2024. Over the past four years, this equates to an annual average of approximately 35,400 units receiving planning approval.
Notwithstanding these improvements, a substantial and sustained increase in planning permissions, commencements, and completions will be required to address the structural undersupply in the market. Sherry FitzGerald Research estimates that approximately 56,200 new homes are required annually over the medium term to meet demand.
Based on 2025 completion levels, only 65 per cent of annual demand was satisfied – an improvement on the 54 per cent recorded in 2024, but still materially below requirements. Importantly, delivery levels varied significantly by region.
Dublin and the Mid-East, which accounted for the majority of completions in 2025, achieved higher proportions of demand satisfaction at 84 per cent and 70 per cent, respectively.
By contrast, the west, border, and midwest regions met less than half of their estimated annual demand. The revised targets set out in the National Planning Framework indicate that housing delivery in the west, border, and mid-west regions will need to nearly double relative to 2025 levels to meet projected demand.
While Dublin and the mid-east must also expand output, the required increases are comparatively lower, at 31 per cent and 33 per cent, respectively. Persistent shortfalls in new home completions continue to exert pressure on the second-hand market.
The Sherry FitzGerald Second-Hand Price Index recorded annual price growth of 6.8 per cent in Q4 2025. Although this represents a moderation from 7.2 per cent a year earlier, price growth remains resilient.
Inflation in Dublin stood at 5.8 per cent, compared with eight per cent outside the capital. Notably, the border region – where the proportion of satisfied demand was among the lowest in 2025 – recorded the strongest price growth at 11.1 per cent.
The Government’s sustained commitment to addressing housing supply constraints is welcome and should support improved market confidence and greater stability.
While the increase in completions during 2025 is a positive development, maintaining this trajectory – and ensuring more balanced regional delivery – will be essential to preventing further disparities and achieving long-term market equilibrium.
