Banking and Payments Federation Ireland has warned about potential housing supply issues next year, mainly due to a fall in the number of commencements.
BPFI's latest Housing Market Monitor reveals that 16,000 commencements were made last year, a steep drop fall from the figure of 69,300 in 2024 when activity surged ahead of the expiry of development levy waivers.
A particularly sharp fall was recorded in parts of Dublin, today's monitor showed, with activity declining by almost 84% in Fingal and South Dublin.
BPFI noted that self-builds accounted for 23% of all starts, the highest share since 2018.
It added that units commenced in 2024 must be completed by the end of 2026 to qualify for levy waivers, so overall housing output is expected to reach nearly 39,000 units this year - assuming the strong momentum in construction continues.
The monitor also points to a fall in the number of mover mortgage drawdowns, and second hand property sales, which BPFI said will further reduce supply on the market.
Today's report shows that there were 36,284 housing completions in 2025, 20.4% more than in 2024 and the highest annual total recorded since the 12 months ending June 2009.
It noted that the final quarter of the year saw particularly strong activity, with 12,000 homes completed, up 38.5% compared with the same time in 2024.
More than half of the annual increase last year was driven by a sharp rise in apartment completions, mainly in Dublin, where apartment output rose by over 46% to more than 9,600 units.
Today's report also reveals that the number of existing or second-hand homes sold fell for the third year in a row last year to 38,502, the lowest level since 2020.
BPFI said this implies that fewer second-hand homes are available to buy than in recent years but also that more homeowners may be staying and investing in their current homes rather than moving.
"Moreover, according to the latest CSO data, spending on home improvements has risen sharply in recent years, increasing from €3.9 billion in 2019 to over €7.5 billion in 2024, and is likely to have reached €8 billion in 2025," BPFI said.
"This sustained rise in improvement activity has coincided with the decline in second-hand property sales and mover purchaser mortgage drawdowns observed over the past three years," it added.
According to today's report, annual mortgage drawdown volumes increased by 7.7% in 2025 to 46,358, with first-time buyers accounting for 60% of all drawdowns.
It noted that while total mortgage drawdown values peaked at nearly €40 billion in 2006, almost half of that total was driven by residential investment letting (RIL), switching, and top-up loans.
FTBs have also grown substantially as a share of the market, from 18% in 2006 to 60% in 2025 while mover purchaser activity has continued to weaken, it said.
It also reveals that mover purchaser mortgages accounted for more than one third of the market in 2014, but volumes have now declined for three consecutive years and represented just 19% of the market in 2025, similar to shares seen at the height of the 2006 market, albeit with vastly different housing output - there were over 88,000 units in 2006.
"Overall, 2025 delivered solid housing output and continued strength in the mortgage market and the outlook for 2026 looks positive for both the housing and mortgage markets," Brian Hayes, the chief executive of BPFI, said.
"However, the steep decline in commencements during 2025 presents risks to future supply next year without a significant rebound in scheme and apartment commencements during this year," he added.
