The Irish housing system is entering another phase of reform. Government has introduced new initiatives aimed at accelerating delivery, including the Housing Activation Office, changes to planning rules and the recommendations of the Accelerating Infrastructure Taskforce.
The central question for the construction sector is simple. Will these changes materially increase supply or will the structural problems that have constrained delivery for years continue to dominate?
Across the industry there is cautious optimism, but it is accompanied by a strong message that deeper structural issues remain unresolved. Developers, economists and policymakers all point to the same interlinked barriers: planning delays, insufficient serviced land, infrastructure bottlenecks and the viability challenges facing builders.
For some, the reforms represent meaningful progress. For others, they are incremental changes within a system that still struggles to translate policy into homes on the ground.
What emerges from conversations across the sector is a consistent view that Ireland’s housing shortage cannot be solved by a single policy intervention. It requires alignment between land zoning, infrastructure delivery, planning certainty and construction capacity.
Michael O’Flynn, Chairman and CEO of O’Flynn Group
A long road ahead for housing supply
Few people in the industry speak more bluntly about the scale of the challenge than Michael O’Flynn, Chairman and CEO of O’Flynn Group. Michael says recent projections suggest Ireland’s housing shortage will not be resolved quickly.
“I was looking at the Department of Finance Future 40 report,” he says. “Housing demand is projected to peak in the early 2030s and the pent-up demand is projected to be eliminated by 2041.”
That timeline implies the housing crisis could continue for another decade and a half if current supply levels remain unchanged. “That indicates a 15-year wait,” Michael says. “That is absolutely extraordinary. We simply are not building enough houses and there is no other way to put it.”
Michael was a member of the Housing Commission, which spent two years examining structural reforms for the housing system. Despite the depth of the work, he says the recommendations received limited traction.
“We spent over two years working on that report with people from both the public and private sectors,” he says. “Unfortunately, it did not really get any real traction in government.”
He contrasts that experience with the response to the Accelerating Infrastructure Taskforce. “That document is getting a lot of traction and rightly so,” he says. “But infrastructure alone will not fix housing.”
For Michael, solving the housing crisis depends on three critical conditions being met simultaneously.
“When it comes to satisfying the housing market you need land that is available, viable and deliverable,” he says. “Unless you have those three things you are not going to fix the housing crisis.”
The zoning challenge
The availability of development land remains one of the most contested issues in Irish housing policy. Government has attempted to address this through Section 28 guidelines encouraging local authorities to zone more land.
However, Michael says the results are inconsistent. “The government has shown initiative in encouraging more land zoning but, unfortunately, some local authorities are not listening.” He says that divergence creates uncertainty for developers attempting to bring projects forward.
“Some local authorities are taking full note of what the government has asked them to do,” he says. “Others are sticking to their own plans and ignoring the fact that government is looking for more zoned land.”
Patrick Phelan, Managing Director at Ballymore Group
Patrick Phelan, Managing Director at Ballymore Group, sees a similar challenge emerging from the land supply side. “The work done by the Department of Housing over the last 18 months has demonstrated the deficit of zoned and serviced land across the Greater Dublin Area and the wider country,” he says.
While local authorities have begun reviewing development plans, Patrick says progress remains uneven and slow. “The Section 28 guidelines are starting to come online,” he says. “However, more work is needed by the Department and the Office of the Planning Regulator to establish consistency among local authorities.”
Without that consistency, he argues, housing delivery forecasts risk becoming detached from reality. “There needs to be a realistic view on the number of homes that will actually be delivered in the short to medium term.”
Sean O’Driscoll, a member of the Government’s Accelerating Infrastructure Taskforce. Photo: John Allen/Provision
Serviced land versus theoretical supply
Even where land is zoned, another barrier often emerges. Infrastructure. Sean O’Driscoll, a member of the Government’s Accelerating Infrastructure Taskforce, believes the link between infrastructure and housing delivery is absolute.
“We can never fix our housing crisis unless we fix our infrastructure crisis,” he says. “They are inextricably linked.” Zoning land without infrastructure does not translate into homes. “Additional zoned land on its own will not fix the housing crisis unless the services are there,” he adds.
He points to North Dublin as a stark example. “There are plans to build thousands of new homes in north county Dublin,” he says. “But as of today, there is not sufficient water or electricity infrastructure to service those new homes.”
The timeline for infrastructure capacity is tight. “We will run out of available capacity somewhere between two and three years from now.”
That gap highlights the need for coordination between utilities and local authorities.
“In the past there was not sufficient joined up thinking between service providers and local authorities,” he says. “One of the outcomes of the taskforce will be better coordination between those bodies.”
Patrick Phelan echoes the same point.
“Utility providers including ESB and Uisce Éireann must be consulted and commit to servicing zoned lands in the short term,” he says. Without that alignment, builders remain unable to start projects even when land is technically zoned.
“Until this process is substantially progressed, commencing and completing much needed housing will remain a challenge for house builders,” Patrick says.
Infrastructure reform gathers pace
The Accelerating Infrastructure Taskforce aims to address many of these systemic bottlenecks. Sean says the action plan is comprehensive and designed for rapid implementation.
“There are 30 actions broken down into 156 sub actions,” he says. “By the end of quarter two 2026, two thirds of those sub actions must be implemented.”
Each action is tied to direct political accountability.
“The minister and the secretary general of the relevant department are named as responsible for implementation,” Sean says. That structure is intended to prevent delays and ensure momentum. “There is total transparency and direct accountability,” he adds.
The taskforce also remains in place to monitor progress.
“Our role now is to oversee the implementation and call it out if it is not being done,” Sean says. He believes the shift is already influencing decision making across the system. “There is a change in the risk appetite,” he says. “The system is now saying we are getting on with things.”
One of the clearest signals of this changing approach can be seen in how the State is now handling legal challenges to major housing projects. For years, judicial reviews have acted as a brake on delivery. Even when projects ultimately succeeded in court, the mere existence of a legal challenge often halted construction entirely until the case had been resolved.
Given the length of time such cases can take to work through the courts, this created a culture of risk aversion across the system. State bodies, local authorities and developers frequently opted to wait for legal certainty before proceeding with construction works, even where projects were considered strategically important.
In practice, this meant that a single judicial review could stall projects for months or even years before a shovel ever hit the ground. Sean says that mindset is beginning to change.
“One of the examples is that the LDA announced that they are going ahead with construction on the former Central Mental Hospital site, a development that will deliver almost 1,000 social, affordable and cost-rental homes, despite the fact that there was an ongoing judicial review against it,” he says.
While that high court action has now been withdrawn, the example is case in point of the impact of growing confidence in the system. In the past, that approach would have been unlikely.
“They would not have made that decision six months ago because there was risk aversion within the system,” Sean says. Instead of pausing delivery until the courts conclude, the Land Development Agency had decided to proceed with the development while the legal process runs in parallel.
“They have now decided we’re going ahead, we’re doing this,” Sean says. “And if there’s a judicial review, we’ll deal with the judicial review.” The shift may appear procedural, but for housing delivery it represents a significant change in practice.
Waiting for judicial reviews to conclude before proceeding with projects has historically added long delays to already complex delivery timelines. By progressing construction where possible rather than halting projects entirely, the state is signalling a greater willingness to accept managed risk in order to accelerate delivery.
For the construction sector, this shift in attitude is as important as any legislative reform. If replicated across major housing and infrastructure projects, it could begin to shorten delivery timelines that have long been stretched by legal uncertainty.
He also highlights procurement progress on the North Dublin drainage scheme. “They have started the process of buying specialist equipment before construction begins,” Sean says. That earlier procurement approach could save significant costs. “Every month delay on that project adds five million Euro,” he says.
By advancing procurement of equipment and other processes those costs are being reduced.
Robert Kelly, Central Bank of Ireland Chief economist and Chief Data Officer
Structural pressures on SME builders
While planning reform and infrastructure investment dominate the current policy debate, structural challenges within the construction sector are also limiting the pace of housing delivery. Robert Kelly, Central Bank of Ireland Chief economist and Chief Data Officer, says the Irish housebuilding sector faces persistent economic constraints that have intensified over the past decade, particularly for smaller builders.
One of the most significant differences between Ireland and comparable European countries is the scale of construction firms.
“Irish construction firms are significantly smaller than their European counterparts,” Robert says. Only a small proportion reach a size that allows economies of scale. “Only 3.2 per cent of Irish construction firms have more than 10 employees,” he says. “That compares with 5.5 per cent in Finland and 7.2 percent in Estonia.”
This fragmentation limits productivity and makes it harder for firms to invest in technology or run multiple projects simultaneously.
Investment levels remain another challenge.
“Investment in machinery, equipment and new technologies remains significantly below pre-crisis levels,” Robert says. More than a decade after the financial crash, the sector’s capital base has not fully recovered. “The capital stock is still about 20 per cent below 2008 levels,” he says.
That gap leaves the industry heavily reliant on labour intensive methods rather than modern construction technologies.
The cost equation
Cost pressures have also reshaped the viability of development. “Between 2007 and 2020 build costs increased by between 70 and 90 per cent while house prices fell by around 20 per cent,” Robert says.
That imbalance created major viability challenges for builders attempting to restart development activity after the crash. More recently, materials inflation has added further pressure. “Material costs rose more than 36 per cent between the end of 2020 and mid 2024,” Robert says. Although house prices have risen in recent years, volatile input costs continue to create uncertainty for projects that can take several years to deliver.
Financing and investment barriers
Access to finance is another persistent challenge, particularly for SME builders. Robert says that while banks and alternative lenders can provide debt financing, the real constraint is equity. “Debt financing capacity does exist in the market,” he adds. However, many construction firms lack the capital required to start or scale projects.
“There is a lack of equity among construction firms, both in terms of retained earnings and external investment,” Robert says.
Smaller companies are particularly affected. “Smaller firms are less likely to attract external equity investment,” he says. Without stronger balance sheets or investment partners, many builders struggle to expand activity even when demand is strong.
Planning and policy uncertainty
These structural pressures are compounded by Ireland’s planning and regulatory environment, although recent reforms have begun to improve decision timelines.
“Turning to the planning process, it is a crucial enabler in accelerating housing delivery,” he says. Recent data from An Bord Pleanála suggests progress.
Average planning decision times have decreased and early results from the Large- Scale Residential Development model are encouraging. “There has been about a 50 per cent increase in usable permissions,” Robert says. However, he notes that the system must continue to improve if it is to support the level of housing delivery required. For developers and investors, certainty within the system remains critical.
“For our long run economic benefit, the recent legislative reforms must ensure speed and certainty in the planning system.” That certainty is particularly important for smaller builders, who are more exposed to delays and policy shifts.
What reforms could make the biggest difference
While the challenges are complex, Robert says several policy changes could significantly improve the environment for housebuilding. One of the most important is streamlining the planning system.
“Reducing delays and increasing certainty in planning would improve viability and enable development in high demand urban areas,” he says. Infrastructure investment is another critical factor. “Public capital investment in water, sewerage, transport and energy networks should be prioritised in areas of highest demand,” Robert says. Improving productivity across the sector will also be essential.
“Greater standardisation of building designs and wider adoption of modern construction methods could deliver significant cost reductions.”
Techniques such as modular construction could potentially reduce building costs by between 20 and 40 per cent. Robert also highlights the need to attract more private investment.
“Policy measures that crowd in private investment could help address the equity gap,” he says.
Diarmuid O’Sullivan, owner of Carrickreagh Developments Limited
Diarmuid O’Sullivan, owner of luxury homes builder Carrickreagh Developments Limited, experiences those pressures directly as a small developer working on infill sites. “We are a small house builder working on two or three sites at a time,” he says.
Infrastructure constraints are often the first obstacle. “You might have zoned land but no electricity or drainage,” he adds. “Zoning without infrastructure is theoretical supply not real supply.”
Judicial reviews can be particularly damaging for smaller developers. “They have a bigger impact on smaller builders than large ones,” Diarmuid says. A delayed project can threaten the financial viability of the entire company.
“Some small builders have to walk away or become insolvent because of judicial review delays,” he says.
The cost imbalance in legal challenges
One of the most controversial elements of the planning system is the cost structure surrounding legal challenges. Diarmuid says the imbalance between developers and objectors is stark. “A litigant can take a case for about 50 euro,” he says.
Developers, however, face far higher legal costs. “You could rack up one hundred thousand euro in fees defending a project,” says Diarmuid. That imbalance creates a powerful incentive to challenge developments. “The delay itself becomes a weapon.”
Even unsuccessful cases can still disrupt projects for years.
“I had a project held up in An Bord Pleanála for two and a half years,” Diarmuid says. During that time construction costs continued rising. “The houses were 10 per cent more expensive by the time the delay ended.”
Policy stability and investor confidence
Beyond planning delays, developers also highlight the impact of shifting housing policies. Diarmuid says policy changes mid project can disrupt the financial assumptions behind developments.
“A project from start to finish can take five years,” he says. During that time regulations and market conditions may change significantly. “We have seen multiple policy shifts around property since 2016.”
Those changes can undermine the viability of projects already underway. “For smaller builders the mid cycle interference is a problem.” He believes planning permissions should provide greater certainty.
“If you start a project the pathway should remain fixed for the life of that permission.”
Housing Activation Office under scrutiny
The Housing Activation Office is intended to accelerate the delivery of infrastructure funding to unlock housing sites. Many builders see potential in the concept but say the execution must remain practical. Diarmuid says the funding available could make a meaningful difference.
“The Housing Activation Office has a billion Euro to spend,” he says. However, he worries that smaller builders may struggle with the administrative burden. “The application process can be heavy,” he says. Large developers with dedicated teams are better equipped to navigate the system.
“That is fine if you are a large developer with a full team managing the logistics,” Diarmuid says. For smaller firms the process can be more challenging. “It should be a much easier process to dispense that money,” he adds. He also warns against misallocation of infrastructure funding.
“Some local authorities might see it as an opportunity to fund infrastructure for land that will not be viable for 20 years,” he says. That could divert resources away from sites ready to deliver housing quickly.
The importance of data and planning clarity
One proposal gaining attention is a clearer classification of development land. Diarmuid believes local authorities should categorise land according to its readiness for development. “They should classify zoned land as green, amber or red,” he says. That system would distinguish between immediately viable land and land requiring further infrastructure investment.
“It would give much more clarity on what is actually available for development,” Diarmuid says. Without that clarity, supply estimates may be overstated. “A lot of land currently sits in amber or red.”
A broader housing ecosystem
Another challenge highlighted by developers is the balance of housing policy across different segments of the market. Diarmuid believes too much focus has been placed on social housing alone. “The housing ecosystem has multiple parts,” he says. Those include starter homes, family housing and downsizing options. At the moment policy is very focused on the bottom of the wheel,” he says.
He believes expanding the scope of Part V housing could help improve that balance. “Part V should be broadened to include social, affordable and right sizing,” Diarmuid says. That could help release existing family homes back into the market.
“A downsizer moving from a five-bed house into a smaller unit releases a family home for someone else,” he adds.
Local authority perspective
Local authorities argue they are already taking steps to expand housing supply. Fingal County Council says it has reviewed its development plan to increase available housing land. The current plan already has capacity for around 35,000 homes across the county.
Recent changes will add a further 5,000 homes through rezoning and new development areas such as Dunsink. The council says it prioritises land that can be serviced in the short term. It has also applied for more than €106 million from the Housing Infrastructure Investment Fund to support projects enabling almost 20,000 homes.
Since 2015, more than 22,000 homes have been completed in Fingal. In 2025 alone the county recorded more than 3,600 completions, a 49 per cent increase on the previous year.
“We are committed to helping government achieve its housing targets,” says AnnMarie Farrelly, Chief Executive of Fingal County Council. “And we have identified areas across the county which can deliver homes in the short term within existing communities and their amenities.”
She adds: “The county’s housing capacity is now increased with the Fingal Development Plan providing in excess of 850 hectares of zoned undeveloped residential land that is available for housing delivery.”
Can the new system deliver?
The range of reforms now underway represent one of the most ambitious attempts to overhaul Ireland’s housing delivery system in years. For Sean O’Driscoll, the combination of infrastructure reform and stronger accountability provides real grounds for optimism.
“I am very confident the actions will be implemented,” he says. Part of that confidence is also intended to send a signal to investors and developers. “Part of the messaging is to give people confidence that this is really happening.”
The importance of data and planning clarity
One proposal gaining attention is a clearer classification of development land. Diarmuid believes local authorities should categorise land according to its readiness for development. “They should classify zoned land as green, amber or red,” he says.
That system would distinguish between immediately viable land and land requiring further infrastructure investment. “It would give much more clarity on what is actually available for development,” Diarmuid says. Without that clarity, supply estimates may be overstated.
“A lot of land currently sits in amber or red.”
A broader housing ecosystem
Another challenge highlighted by developers is the balance of housing policy across different segments of the market. Diarmuid believes too much focus has been placed on social housing alone. “The housing ecosystem has multiple parts,” he says. Those include starter homes, family housing and downsizing options.
“At the moment policy is very focused on the bottom of the wheel,” he says. He believes expanding the scope of Part V housing could help improve that balance. “Part V should be broadened to include social, affordable and right sizing,” Diarmuid says. That could help release existing family homes back into the market.
“A downsizer moving from a five-bed house into a smaller unit releases a family home for someone else,” he adds.
AnnMarie Farrelly, Chief Executive of Fingal County Council. Picture by Shane O’Neill, SON Photographic
Local authority perspective
Local authorities argue they are already taking steps to expand housing supply. Fingal County Council says it has reviewed its development plan to increase available housing land. The current plan already has capacity for around 35,000 homes across the county.
Recent changes will add a further 5,000 homes through rezoning and new development areas such as Dunsink. The council says it prioritises land that can be serviced in the short term. It has also applied for more than €106 million from the Housing Infrastructure Investment Fund to support projects enabling almost 20,000 homes.
Since 2015, more than 22,000 homes have been completed in Fingal. In 2025 alone the county recorded more than 3,600 completions, a 49 per cent increase on the previous year.
“We are committed to helping government achieve its housing targets,” says AnnMarie Farrelly, Chief Executive of Fingal County Council. “And we have identified areas across the county which can deliver homes in the short term within existing communities and their amenities.”
She adds: “The county’s housing capacity is now increased with the Fingal Development Plan providing in excess of 850 hectares of zoned undeveloped residential land that is available for housing delivery.”
Can the new system deliver?
The range of reforms now underway represent one of the most ambitious attempts to overhaul Ireland’s housing delivery system in years.
For Sean O’Driscoll, the combination of infrastructure reform and stronger accountability provides real grounds for optimism. “I am very confident the actions will be
implemented,” he says.
Part of that confidence is also intended to send a signal to investors and developers. “Part of the messaging is to give people confidence that this is really happening.”
