There has been some encouraging news on the national housing front in recent weeks. New home commencements rose sharply in January, increasing by 73 per cent to just over 2,000 units. On paper, this looks like the kind of momentum the housing market has been waiting for, but it remains to be seen if this impetus can be sustained.
Commencements rising now is positive, but commencements are not completions. Even with strong activity today, the delivery pipeline remains fragile.
The Department of Housing has quietly acknowledged this reality. Internal analysis suggests that Ireland may struggle to meet its target of delivering 300,000 homes by 2031. More significantly, it warns that housing completions could begin to decline from around 2028 if the current slowdown in planning approvals is not reversed.
That matters enormously for regional markets like Galway.
In Galway city and the wider county, demand for housing remains exceptionally strong. Well-presented second-hand homes continue to attract intense interest and multiple bidders. At the same time, we are seeing very strong demand for new homes from first-time buyers who want energy-efficient properties that qualify for green mortgages and Government supports. But supply simply isn’t keeping pace.
One of the most revealing national statistics is that only two of Ireland’s 31 local authorities rezoned land for housing during the most recent development cycle, despite significant pressure from central Government. That highlights a deeper structural issue within the planning system: while there is broad agreement that more housing is needed, the activation of land remains slow and inconsistent.
There are, however, some positive signals locally. Proposed changes to the Galway development plan could unlock capacity for up to 7,500 homes. If those opportunities are realised, they could represent one of the most important supply interventions in the region in a generation.
The challenge will be ensuring those sites actually translate into delivered homes rather than remaining simply theoretical.
Another factor influencing the market is the continued expansion of State-backed supports. The Government has increased local authority mortgage ceilings to €415,000 and raised the single income threshold to €80,000. In higher-priced markets such as Galway city, this will widen access to homeownership for many buyers who previously fell just outside lending limits.
That additional purchasing power will help buyers, but it also reinforces the central issue: without a corresponding increase in supply, stronger purchasing power risks pushing prices higher rather than improving affordability.
We are already seeing evidence of that pressure in certain segments of the market. While national averages suggest modest price growth, individual homes in strong locations have recorded year-on-year increases approaching €100,000.
These are not isolated anomalies; they reflect the reality of a market where demand consistently exceeds supply.
Meanwhile, structural imbalances remain across the wider housing system. Ireland is estimated to have a shortfall of nearly 39,000 purpose-built student beds across Dublin, Cork, Limerick and Galway. That shortage has a direct knock-on effect on the private rental sector, where students are often competing with working tenants for standard housing stock.
All of this points to a deeper issue. According to the Housing Commission, Ireland may already be carrying a housing deficit of more than 250,000 homes, a gap built up over more than a decade of under-delivery.
If that assessment is correct, then simply planning for future demand may not be enough. Closing the existing deficit will require sustained and accelerated delivery across both private and public housing.
For Galway, the fundamentals remain extremely strong. The city continues to attract investment, employment growth and population expansion. Demand for housing is not the problem.
The real test now is whether the development pipeline can keep pace.
Because while today’s market may feel tight, the real housing story for Galway will be written by the homes that either do, or do not get built over the next five years.
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