Property Insights by Johnny Gannon, Founder & CEO, Fair Deal Property
There has been some encouraging news on the national housing front in recent weeks. New home commencements across Ireland rose sharply in January, increasing by 73% to just over 2,000 units. On the surface, that appears to be the kind of momentum the housing market has been waiting for.
But in property, the headline numbers rarely tell the full story.
Commencements are not completions. A rise in the number of homes beginning construction today does not automatically translate into a steady flow of homes reaching the market in the years ahead. Even with stronger building activity now, the delivery pipeline remains fragile.
For anyone watching the Galway property market, the bigger question is not what has started this year but what will actually be delivered over the next five years.
And that is where the outlook becomes more uncertain.
The Department of Housing has quietly acknowledged what many in the development and property sectors already suspect. Internal analysis suggests Ireland may struggle to meet its target of delivering 300,000 homes by 2031.
More concerning again is a warning that housing completions could begin to decline from around 2028 if the current slowdown in planning approvals is not reversed.
That timeline is important.
Housing delivery operates with long lead times. A housing development approved today may not deliver completed homes for three to five years. If planning approvals slow now, the impact will not be felt immediately but it will inevitably show up later in the form of fewer homes reaching the market.
In other words, today’s planning decisions shape tomorrow’s housing supply.
And that matters enormously for regional markets like Galway.
Anyone active in the Galway property market can see that demand remains exceptionally strong.
Well-presented second-hand homes in Galway City and surrounding areas continue to attract intense interest. Competitive bidding is common, particularly in established residential neighbourhoods where supply remains extremely limited.
At the same time, demand for new homes in Galway remains exceptionally robust.
First-time buyers in particular are actively seeking energy-efficient properties with strong BER ratings that qualify for green mortgage products and government incentives. These homes are increasingly seen as the most future-proof option for buyers navigating rising energy costs and evolving building standards.
However, while demand continues to grow, supply is struggling to keep pace.
That imbalance is one of the defining characteristics of the Galway housing market today.
One of the most revealing national statistics to emerge recently relates to land zoning.
Despite repeated calls from central government for local authorities to facilitate more housing development, only two of Ireland’s 31 local authorities rezoned land for housing during the most recent development cycle.
That statistic highlights a deeper structural issue within Ireland’s planning system.
There is broad consensus that the country needs more housing. However, the activation of land the process of moving from zoning to planning permission and ultimately to construction remains slow and inconsistent.
For developers, uncertainty in the planning pipeline makes long-term investment decisions more difficult.
For buyers, the result is simple: fewer homes coming to market.
Despite these challenges, there are also some positive signals emerging locally.
Proposed changes within the Galway Development Plan could unlock capacity for up to 7,500 new homes across the region. If realised, these opportunities could represent one of the most important housing supply interventions in Galway in a generation.
Unlocking development capacity at that scale would provide significant support for the Galway housing market, helping to address supply constraints that have built up over many years.
But planning capacity alone does not automatically translate into homes being built.
The real challenge lies in ensuring that zoned land moves through the development pipeline from planning approval to viable construction projects.
Without that transition, the housing capacity exists only on paper.
Another factor shaping the Galway property market is the continued expansion of State-backed homeownership supports.
The Government recently increased the ceiling on Local Authority home loans to €415,000 while also raising the single income eligibility threshold to €80,000.
In higher-value regional markets such as Galway City, these changes could widen access to mortgage finance for many buyers who previously fell just outside lending criteria.
For first-time buyers hoping to purchase a home in Galway, that additional lending capacity could make the difference between being able to buy and remaining locked out of the market.
However, increased purchasing power comes with its own consequences.
If access to credit expands without a corresponding increase in housing supply, it can inadvertently contribute to further price inflation.
In other words, stronger demand without increased supply can push prices higher.
We are already seeing evidence of that dynamic in parts of the Galway housing market.
National averages may suggest relatively modest price growth, but those broad figures often mask what is happening on the ground.
Individual homes in strong Galway locations have recently recorded year-on-year increases approaching €100,000.
These increases are not isolated anomalies. They reflect the reality of a market where buyer demand consistently exceeds available housing supply.
Galway remains one of Ireland’s most attractive regional cities, with a strong employment base, a growing technology and medical sector, and continued population growth.
These fundamentals support long-term demand for housing.
But without sufficient new supply entering the market, that demand inevitably places upward pressure on prices.
Another structural factor influencing the Galway property market is the ongoing shortage of purpose-built student accommodation.
Ireland is currently estimated to have a shortfall of almost 39,000 purpose-built student beds across its major university cities — including Dublin, Cork, Limerick and Galway.
For Galway, a city with a major university population, that shortage has a direct impact on the private rental sector.
Students who cannot secure purpose-built accommodation often compete for standard rental housing.
This competition increases pressure on the private rental market, reducing the availability of rental properties for working tenants and pushing rents higher.
In turn, higher rents can push more people towards attempting to purchase property which feeds back into the demand side of the housing market.
According to the Housing Commission, Ireland may already be carrying a housing deficit of more than 250,000 homes.
This shortfall has built up over more than a decade of under-delivery following the financial crisis.
Even if the country begins building homes at a higher rate, closing that gap will take time.
Planning for future demand alone will not be enough.
Ireland must also close the existing deficit and that requires sustained delivery of housing across both private and public sectors.
For the Galway housing market, this national deficit plays out in very tangible ways: strong demand, tight supply, and highly competitive buying conditions.
Despite the supply challenges, the long-term fundamentals for property in Galway remain extremely positive.
Galway continues to attract:
These factors support continued demand for housing across Galway City and County Galway.
From a long-term perspective, Galway remains one of Ireland’s most dynamic regional property markets.
Demand for housing is unlikely to weaken significantly in the foreseeable future.
Ultimately, the most important question for the Galway property market is not whether demand exists — it clearly does.
The real question is whether enough homes will actually be built.
Housing commencements rising today is positive news, but the future supply pipeline will depend on several critical factors:
If those pieces align, Galway could see meaningful expansion in housing supply over the coming decade.
If they do not, supply constraints may continue to shape the market for many years to come.
For buyers, sellers and developers alike, the Galway housing market remains a fascinating space to watch.
Demand remains strong.
The city’s economic fundamentals remain positive.
But housing supply remains the critical constraint.
Because while today’s market may feel tight, the real housing story for Galway will ultimately be written by the homes that either do or do not get built over the next five years.
And that will determine not only the future of the Galway property market, but the accessibility of homeownership across the region.