5 reasons the housing crisis may be turning a corner

Over the past few months, there have been positive noises about the housing market.

Unfortunately, the housing crisis is far from over. That is still years away.

Like the banking crisis, problems built up over a long period and will take years to resolve.

There is a shift under way, however it is a number of relatively small moves in the right direction. Here are some of them:

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1. House completions up

The number of new homes built between July and September of this year is up 10.4% on last year.

So far in 2026 there have been almost 27,000 dwellings finished.

Analysts predict between 39,000 and 40,000 will be completed by the end of the year, compared to a total of 36,000 in 2025.

It's an indication of progress - but still well short of the 50,000 to 60,000 needed to meet pent-up demand estimated at 250,000 to 300,000 homes.

The Government scrapped annual targets and instead said it wanted to see 300,000 homes built between 2025 and 2030.

To achieve that, a substantial increase in annual output is needed.

2. Mortgage lending rising

Figures from the banks show the number of first-time buyer mortgages is up 9% year on year.

There have been 22,600 home loans taken by first-time buyers so far this year.

There is a 7% rise year on year in the number of people drawing down mortgages to move from one home to another.

That indicates that there is more liquidity in the market.

3. More listings

Home buyers are not just buying new houses, the market for older homes is important too.

There is slightly more positive news here as well. In September, 14,600 properties were listed for sale on MyHome, up 12.5% year on year, as the supply of new listings finally improves.

The market has been contracting over recent years as potential sellers hesitated due to concerns about finding another home.

4. Slower growth in property prices

Soaring property prices is one of the symptoms of huge demand and lack of supply.

This time two years ago prices were rising by 10% per annum. That increase has now slowed to 5%. Economists say it will decelerate further to 3% or 4%.

Nobody is forecasting a drop in property prices because demand remains strong and Central Bank rules have prevented banks from over-lending.

The market may be cooling off for a number of reasons. Higher interest rates usually dampen house price growth.

The European Central Bank hiked rates from 2% to 2.5% over recent months with another rate rise expected in December.

But for many buyers it has reached the point where affordability is now at or beyond their limit.

5. Government policy changes

The Government has introduced significant policy changes to encourage investors by altering building standards, reducing VAT on new apartments and relaxing rent controls.

Opposition parties have been critical of these steps. They point out that tenants have been affected by the new rules.

It comes as homeless numbers hit a record of 17,885 people in emergency accommodation.

Unsurprisingly, the new measures have been welcomed by the construction industry.

There is a lot the Coalition needs to do to lift the output of new housing above the critical 50,000 threshold.

One of the dangers is that progress could stall because of changes in the wider economic environment.

The construction industry is facing higher inflation, rising interest rates and geopolitical uncertainty which may make investors hesitant before financing new projects.

Goodbody Stockbrokers chief economist Dermot O'Leary, who was a member of the State's Housing Commission, said several policy levers need to be pulled by the Government to step up progress.

He said these include "continuing fiscal supports for the social housing sector and home ownership" and "faster progress on rezoning of residential land".

Mr O'Leary also calls for a "coordinated response" on the provision of utilities such as water and electricity connections to ensure sites can be developed.

In addition, he said there needs to be further work to reform the planning system.