A recent study by the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) describes the situation in frank terms: “The housing crisis is of pandemic proportions. A failure to either identify or deliver on housing need over previous decades has led to chronic undersupply, resulting in an affordability crisis across every housing segment.”
Over the past decade, members of Irish Institutional Property (IIP), backed largely by domestic and international pension funds, have delivered more than 55,000 new homes for sale and rent
Across seven major EU markets, the funding alone needed to meet this undersupply has been estimated at an astonishing €12 trillion. Here, the Department of Finance has estimated the figure at about €20 billion on an annual basis.
The progress we have made here relative to the rest of Europe during the term of the last Government is notable, as underlined by EY-Euroconstruct in June when it reported that “the pace of construction of new residential homes in Ireland is continuing to accelerate” with estimates for completions revised upwards to 36,000 for last year and to 41,000 for 2025.
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Housing completions per 1,000 of population in Ireland – at 6.9 in 2024 and 7.7 in 2025 – are projected to be the strongest among the 19 Euroconstruct European countries.
Nonetheless, the scale of historic undersupply of housing means quick-fix solutions are nowhere in sight and successfully meeting the challenge will outlast any government term and requires a generational response. More importantly, it cannot be solved by the taxpayer alone. The scale of funding needed demands the involvement of institutional capital, which has been unfairly criticised by some politicians and commentators. But the reality is clear: that capital is essential to unlocking the housing supply we so urgently need.
To move forward Ireland must fully embrace institutional investment as a critical partner in addressing its housing needs. Over the past decade, members of IIP – backed largely by domestic and international pension funds – have delivered more than 55,000 new homes for sale and rent.
These investors, which include pension funds and insurance companies, are ideal partners for the public sector. Their focus on long-term, stable returns aligns closely with the State’s housing goals. Unlike short-term private capital, institutional investors prioritise stability and sustainability, making them natural and reliable partners in delivering housing at scale.
IIP members have the ambition to accelerate the delivery of new housing stock while improving the quality and management of rental properties. They also have the potential to expand the range of tenancy options available, particularly in the cost rental and social housing sectors – areas where Ireland faces significant deficits.
Yet, the negative narrative persists in some quarters, suggesting that institutional investment is incompatible with public policy objectives. This misconception undermines progress and risks sidelining a vital source of housing capital.
As we turn the page to a new year, Ireland has the opportunity to rethink this narrative and demonstrate how public and private interests can work hand in hand. Many of our European neighbours have successfully implemented initiatives to harness institutional capital for housing delivery. These include supportive regulatory frameworks for social housing, incentives for cost-rental schemes, and intermediary housing models that cater to middle-income households. While no single intervention offers a complete solution, these approaches provide valuable lessons for Ireland.
In Finland, the Housing First model integrates institutional investment with public policy to provide stable housing for vulnerable populations. In the Netherlands, public-private partnerships have delivered cost-rental housing at scale, leveraging institutional capital to meet both affordability and sustainability targets.
These examples show that a partnership approach to institutional investment, backed by the right policies, can reap great benefits and Ireland can adapt these examples to suit its particular needs, particularly in urban centres such as Dublin where housing pressures are most acute.
Any new partnership approach must also address the significant bureaucratic hurdles that are placed in the way of housing delivery here. The alignment of public and private objectives is not just desirable; it is essential. The INREV report states “in Ireland from 2020 approximately 30,000 housing units funded by institutional capital were held up in planning appeals for over three years, over the course of which changes to density, building standards including increased space standards, as well as interest rate movements had eroded financial viability. Consequently, a significant proportion of the capital withdrew”.
While there are many positive aspects of current housing policy and related initiatives that have directly supported a significant increase in new housing supply, they cannot facilitate the scale of delivery and co-ordination now required to yield long-term transformative change. Without a unified strategy these efforts will not match the level of output needed to deliver sustainable long-term solutions to our housing needs.
Underpinning this strategy must be policy tools that include land-use planning reforms, public guarantees and reform of the rental cap in addition to incentives that can lower the barriers to entry for institutional investors and unlock supply.
Above all, Ireland needs a stable and predictable housing policy regime that aligns the objectives of all stakeholders – Government, institutional investors, developers and communities. Such a strategy must be resilient to economic cycles and provide a clear roadmap for housing delivery over the next decade and beyond. Ad hoc measures or short-term policy experiments will not suffice.
Pat Farrell is chief executive of Irish Institutional Property
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