Will the money allocated in Budget 2025 boost housing output next year? It’s a simple question, versions of which Government TDs will be peppered with on the doorsteps over the coming months as election season ramps up.
As expected, the “record” €6 billion housing budget, as politicians have breathlessly dubbed it, contains very little in the way of new policy. What is new is the €4.5 billion in capital funding allocated to the Department of Housing — up from €3.9 billion in 2024 — some €3.18 billion of which will fund the Government’s housing strategy.
Overall, the tea leaves do not augur well with output appearing to plateau in 2024 compared to last year. As ESRI associate research Prof Kieran McQuinn said at the think tank’s post-budget briefing on Friday, it was hoped there would be something of a “step up” this year from the 33,000-34,000 deliveries in 2023, “maybe nearing 40,000″ in 2024. “Now it seems likely that we’re not going to get that. You’re going to get something around the region of 32,000 or 33,000, which, in broad terms, is disappointing,” he said.
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It’s also a far cry from the 40,000 promised by Taoiseach Simon Harris and his Coalition partners earlier this year.
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In reality, whether or not the funding allocated to housing this year delivers an uptick in the number of new homes completed next year is contingent on other factors. A wider malaise has set in across a construction sector that has been dogged by labour shortages in the post-Covid environment, while private-sector financing costs remain elevated after a period of aggressive central bank interest rate hiking. Against this backdrop, McQuinn said Government involvement in funding housing delivery remains crucial if it wants “to see the level of output continue to grow over the medium term”.
Yet there is some hope that output could jump above 35,000 in 2025. Although there are concerns about the quality of the data, housing commencement figures this year have been promising and point to a strong pipeline for next year. The additional cash allocated to housing in the budget can certainly help with that.
But output is likely to remain anaemic relative to demand and to the lofty, moving targets the Government continues to trot out. The good news for Minister for Housing Darragh O’Brien and company is that it might be someone else’s problem next year.
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