Fazlur Rahman
Quick Answer
The Central Bank of Ireland cut its 2026 housing completions forecast by 500 homes to 39,500 in its Q3 Quarterly Bulletin (Sep 16, 2026), with 41,000 expected in 2027 and 45,000 in 2028 — all against the 50,000+ needed annually. CSO data still shows prices rising 5.5% year-on-year in July, and the permission-to-completion pipeline now takes four years, twice as long as a decade ago.
Last verified: Sep 16, 2026.
At a glance
- 2026 completions: cut by 500 to 39,500 (Central Bank, Sep 2026)
- 2027 / 2028: 41,000 / 45,000 — both trimmed
- Annual need: >50,000 homes to satisfy pent-up demand
- House prices: +5.5% YoY in July — slowest since Jan 2024 (CSO, Sep 2026)
- Pipeline delay: permission → completion = 4 years (2x a decade ago)
- Demand driver: MDD growth revised up to 3.8% for 2026; savings rate highest in eurozone
The forecast cut
Every completions number moved down. The Central Bank's Q3 Bulletin, published September 16, cut the 2026 forecast by 500 homes to 39,500, reduced 2027 to 41,000 (down 2,000) and 2028 to 45,000 (down 1,000). Each year sits below the more than 50,000 homes needed annually to satisfy pent-up demand (Central Bank of Ireland, Sep 16, 2026).
The mechanics are visible upstream: planning permissions have stagnated at around 35,000 per year since 2023, commencements ran at only about 16,000 homes in the first half of 2026, and the average journey from permission to completion now takes four years — twice as long as a decade ago. A permission granted this year is, on average, a 2030 completion. The forecast cut is not a demand call; it is an admission about delivery capacity (Central Bank of Ireland, Sep 16, 2026).
Why prices still rise 5.5%
Demand keeps outrunning the pipeline. CSO data shows residential property prices up 5.5% year-on-year in July — down from 5.6% in June and the weakest print since January 2024, but still firmly positive (CSO, Sep 16, 2026). Behind it: an economy the Central Bank now expects to grow 3.8% in 2026 on a modified-domestic-demand basis — revised up 0.5 percentage points — powered by rising demand for software and data-centre equipment and resilient consumer spending, with the household savings rate the highest in the eurozone.
Mortgages for new homes rose 12%, and population growth is running at the upper end of projections. That is the exact configuration for persistent price pressure: more households, more purchasing power, and a delivery system capped at ~40,000 completions. Robert Kelly, the bank's Director of Economics, notes net inward migration now accounts for roughly two-thirds of employment growth — a demographic tailwind for household formation that the supply side cannot match (Central Bank of Ireland, Sep 16, 2026).
The risks the Central Bank flags
The Bulletin's risk list is heavier than usual. Kelly highlights elevated trade tensions and record temperatures and drought straining food production, alongside the Iran-US war pushing energy prices higher. The severe scenario has headline inflation more than 2 percentage points higher in 2027 than the central forecast — 3.4% in 2026, 3.1% in 2027 and 2.0% in 2028 on the central path (Central Bank of Ireland, Sep 16, 2026).
A severe-scenario inflation path would keep ECB rates higher for longer, feeding directly into Irish mortgage costs — tracker repayments are already up €24-28 per month per €100,000 after June and September — and squeezing the affordability window that has kept first-time buyers in the market. For housing supply, the same scenario raises construction input costs, deepening the very delivery constraint causing the forecast cuts.
| Year | Completions forecast | Change |
|---|---|---|
| 2026 | 39,500 (Central Bank, Sep 2026) | Cut by 500 |
| 2027 | 41,000 | Cut by 2,000 |
| 2028 | 45,000 | Cut by 1,000 |
| Annual need | >50,000 | Structural shortfall |
| Planning permissions | ~35,000/yr since 2023 | Stagnant |
| H1 2026 commencements | ~16,000 | — |
| Permission → completion | 4 years | 2x a decade ago |
What enterprise buyers should do next
Three actions for buyers, builders and investors.
- Buyers: treat the 5.5% deceleration as a window, not a trend. With completions capped near 40,000 against 50,000-plus demand, supply cannot catch up within this forecast horizon — waiting for a correction bets against the arithmetic.
- Builders: the constraint is permissions, not demand. Any developer who can compress the four-year permission-to-completion cycle — through strategic housing development fast-tracking or upscaled commencement — captures a persistent scarcity premium.
- Investors: model the severe scenario. Inflation 2pp above base in 2027 means materially higher funding costs; stress-test Irish residential underwriting against ECB rates staying at 2.5%+ through 2027 (Central Bank of Ireland, Sep 16, 2026).
What to watch next
Three datapoints settle the trajectory. First, the CSO August price index — whether the July deceleration to 5.5% continues or reverses. Second, Budget 2027 measures for housing supply announced in October, which will either attack the permission bottleneck or leave it intact. Third, Q4 commencement data, which determines whether the 41,000 forecast for 2027 is achievable or the next cut in waiting (Central Bank of Ireland + CSO, Sep 16, 2026).
