Ireland’s Housing Targets in Crisis: Labour Shortages Undermining Construction Goals

Ireland’s persistent struggle to meet its annual housing targets has taken another hit, with the Central Bank now forecasting just 32,500 new homes for 2025 — a shortfall of 1,500 units from previous expectations. This revision is part of a wider trend, with projected completions for the years ahead also being reduced, sparking serious concerns about the state’s capacity to tackle the housing crisis. At the heart of the problem lies a chronic shortage of labour in the construction sector — a factor clearly outlined by the Central Statistics Office (CSO) and echoed in the Central Bank’s recent analysis.

While housing demand continues to surge, fuelled by population growth, inward migration, and delayed household formation, the supply side remains severely constrained. The CSO and Central Bank both point to structural bottlenecks, particularly the lack of skilled construction workers, as a key barrier. These shortages span trades such as bricklayers, electricians, carpenters, and plumbers — all vital roles for progressing housing developments at scale.

The Central Bank, highlights that capacity constraints have been underestimated. “We were expecting some labour to transfer from the commercial real estate sector into housing,” he notes, “but the actual movement has been limited.” Much of the available workforce has instead shifted into home improvements rather than new builds, further restricting progress on state targets.

Adding to the strain are infrastructural gaps — specifically water and electricity connections — which further slow delivery timelines. However, without a significant uplift in workforce numbers, even addressing infrastructure will not be enough. The Central Bank notes that commencements of new homes “dropped sharply” in the first quarter of 2025, reflecting both hesitation from developers and a lack of capacity on the ground.

The current construction environment is also affected by broader economic uncertainty, but it is the labour market — particularly the limited pipeline of new entrants — that presents the greatest structural challenge. Unless addressed, the state’s housing targets will continue to drift out of reach, undermining policy credibility and compounding the housing affordability crisis.

To close this gap, experts are calling for an urgent national strategy to attract and retain skilled workers, including tapping into the Irish diaspora through initiatives such as Back 4 Good. Only with a robust workforce can Ireland begin to meet the housing needs of its growing population.