New CIS data reveals significant disconnect between approved developments and actual construction activity
New housing starts have declined 49% year-on-year to their lowest levels since Covid lockdowns, even as planning approvals reach record highs, according to a Q3 2025 report by CIS, Powered by Hubexo. The widening gap raises important questions about Ireland's capacity to deliver on housing targets.
Despite 197 residential developments worth €3.4 billion receiving planning permission in Q3, representing a 46% increase year-on-year covering 13,500 homes, actual construction commencements declined by 53% across all regions. The data suggests last year's government development levy waiver created significant activity in 2024, followed by a sharp adjustment that now impacts housing delivery timelines.
"The substantial shift in housing starts following last year's levy driven activity highlights how policy interventions can create volatility in the construction pipeline," said Dave Thompson, VP for UK and Ireland at CIS, powered by Hubexo. "This presents considerable challenges for meeting Ireland's housing delivery targets."
Understanding the Activity Shift
The decline follows a strong start to 2025, when 284 projects comprising 11,000 homes commenced. Industry observers attribute the shift to developers advancing projects to meet the levy waiver deadline, concentrating activity in 2024 and affecting the 2025 pipeline.
While the government celebrates record housing commencements, it’s worth noting the role of policy incentives. The development levy waiver was extended to December 31, 2024, temporarily suspending local authority 'section 48' residential contributions of €117/m², with developments required to commence by this date and complete by December 31, 2026.
Similarly, the Uisce Éireann water connection rebate, which refunds water and wastewater connection charges, was extended to September 30, 2024, with applications accepted through the end of 2024.
These measures provided developers with significant financial relief, yet CIS data shows that fundamental challenges, such as planning delays, infrastructure bottlenecks and capacity issues, continue to constrain completions.
Significant projects did commence during the quarter, including a €166 million, 817-unit Strategic Housing Development in Balbriggan, though overall commencement volumes remain constrained. The largest approval during Q3 was the €646 million Holy Cross development in Dublin 9, comprising 1,131 apartments.
Non-Residential Sector Shows Similar Patterns
In Q3 2025, the non-residential sector reflected residential trends, with 587 projects worth €1.8 billion receiving planning permission, while the value of projects actually moving into construction decreased 22% year-on-year to €92 million across 394 sites. Dublin saw new investment decline nearly 64% compared to last year, while the Mid-East and South-West regions led activity with €204 million and €196 million respectively. Notable approvals included €300 million in data halls for Naas and a €75 million Beaumont Hospital extension.
Infrastructure Completions Strong Despite Lower Starts
While 46 infrastructure projects worth €1.2 billion were completed in Q3, among the highest completion rates in recent years, new infrastructure starts continue to slow. Sustained investment remains essential for supporting future housing and commercial development, as inadequate infrastructure can constrain delivery regardless of planning approvals.
Key Challenges and Opportunities
"The data reveals critical areas requiring attention. We're seeing a substantial gap between planning approvals and commencements, which indicates challenges with construction capacity, financing availability and market conditions. With housing starts at multi-year lows, achieving government housing targets will require comprehensive strategies beyond planning approvals alone. The levy waiver's impact demonstrates the need for careful consideration of policy timing and market effects, and continued infrastructure investment is essential to support both housing and commercial development pipelines," added Dave Thompson.
Regional distribution shows Dublin accounting for over 5,500 of the 13,500 approved residential units, with Meath and Cork adding 2,000 and 1,900 units respectively. The concentration of approvals creates both opportunities and delivery considerations for these regions.
Industry at Important Crossroads
With substantial approved investment awaiting translation into active construction, Ireland's construction sector faces a pivotal moment. Addressing capacity constraints, financing structures, and policy certainty will be essential for converting the strong pipeline of approved developments into delivered homes and infrastructure.
The full Q3 2025 Construction Activity Report provides detailed analysis across all construction sectors, offering insights for industry planning and decision-making.
