Property Insights by Johnny Gannon, Fair Deal Property
Why Europe’s Building Slowdown Matters for the Galway Property Market
Property Insights by Johnny Gannon, Fair Deal Property
Anyone following the Irish property market in 2026 knows the central problem is supply. Demand for homes in Galway and across the west of Ireland remains strong, driven by population growth, employment expansion, and returning emigrants. What is less well understood is that Ireland’s housing shortage is part of a much wider European pattern, and a new policy paper from the think tank Progress Ireland, titled Building Europe Better, puts numbers on that pattern which deserve serious attention from anyone buying, selling, or developing property in Ireland.
The headline finding is stark. Major European countries are now building at roughly half the rate they achieved at their twentieth century peak. This is a continent that rebuilt entire cities after two world wars, housed a postwar baby boom, and delivered some of the most admired infrastructure in the world. Today, with a significantly larger population, more available capital, and far better construction technology, output has halved. On a per person basis, the decline is even more pronounced.
For those of us working in the Irish property market every day, this finding reframes the housing conversation. Ireland’s supply crisis is often discussed as a uniquely Irish failure of planning or political will. The evidence suggests something broader is happening, and understanding it matters for anyone trying to anticipate where house prices, rents, and development activity in Galway are heading over the next decade.
What Is Actually Slowing Construction Down
The Progress Ireland report argues that Europe has not lost the ability to build, it has made building legally difficult. The mechanism is worth understanding because it explains patterns we see repeatedly in the Galway property market.
EU environmental directives, including the Habitats Directive, the Birds Directive, and the environmental assessment regimes, were designed to ask reasonable questions about the impact of development on nature. The difficulty is not the questions themselves but where they are asked. Instead of being resolved once at the level of regional or national plans, they are contested at the level of every individual project. A developer seeking permission for a housing scheme inherits strategic questions that no single applicant can reasonably answer, such as the cumulative effect of all development in a region on a protected habitat.
The report offers a striking Irish example. In the wider Dublin area, the absence of a strategic plan for the feeding grounds of the Light-bellied Brent Goose has meant the question is raised planning application by planning application. Because no individual developer can resolve a question about an entire species across an entire region, approximately 1,200 homes have been refused permission. Nobody involved set out to block housing. The system simply placed a strategic question in front of applicants who could not answer it.
Galway readers will recognise the dynamic. The report cites the Galway Ring Road as a European example of infrastructure delay, a project that has now spent a quarter of a century moving through cycles of assessment, approval, and legal challenge. Every year of that process has consequences for housing delivery on the east side of the city, for commuter towns like Tuam, Athenry, and Gort, and for the overall functioning of the Galway property market.
The Cost Dimension: Fewer Homes, Higher Prices
Regulation affects housing supply through cost as well as delay, and here the report’s findings are particularly relevant to Irish house prices.
The paper estimates that construction cost inflation arising from the 2019 transposition of EU energy performance standards reduced Irish housing supply by around 10,000 homes between 2019 and 2025, with the true figure potentially higher. More broadly, building costs across Europe in real terms are now 2.7 times what they were in 1971. Higher building standards deliver genuine benefits in energy efficiency and quality, and modern A-rated homes are rightly attractive to buyers. But every increment of cost has a supply consequence, because schemes that no longer stack up financially simply do not get built.
At Fair Deal Property, we see this pattern regularly when appraising development sites across Galway city and county. Land is zoned, demand is proven, and the scheme appears viable on paper. Once regulatory cost, extended timelines, and the associated financing burden are priced in, the margin disappears and the site sits idle. This is the quiet mechanism behind Ireland’s housing shortage, not a lack of demand, not a lack of capital, but a viability gap created substantially by process.
The consequences for buyers are direct. When supply lags demand year after year, prices and rents carry the strain. First-time buyers in Galway competing for a limited pool of new and second-hand homes are experiencing the downstream effect of decisions made in regulatory frameworks years earlier and hundreds of miles away.
A Practical Reform Agenda, Not a Bonfire of Protections
What distinguishes the Progress Ireland paper from much commentary on planning reform is that it does not argue against environmental protection. The proposals are procedural, and they are worth summarising because versions of them may well shape Irish and European policy over the coming years.
First, environmental questions should be answered once, properly, at the plan level, rather than relitigated on every individual application. If a county development plan has assessed the cumulative impact of housing growth on protected habitats, an individual scheme consistent with that plan should not have to repeat the exercise.
Second, nature offsetting should be made easier where it delivers better ecological outcomes. The report cites a German housing project where centralised mitigation would have been between 300 and 5,000 times more cost effective than site by site measures. Better outcomes for nature and lower costs for housing are not necessarily in conflict.
Third, the standard of evidence demanded should be proportionate to the actual risk. Requiring exhaustive assessment for modest, low-risk schemes adds cost and delay without corresponding environmental benefit.
These are reforms to how questions are asked, not whether they are asked. Europe protected its environment while building at twice today’s rate for much of the twentieth century. The argument is that it can do so again.
Why This Matters Now: Ireland Holds the Pen
Timing gives this debate particular relevance. Ireland holds the Presidency of the Council of the European Union until December 2026, which places our Government in a position to influence the European legislative agenda at precisely the moment these questions are being raised across the continent. Housing affordability has been identified at European level as a threat to competitiveness and social cohesion, and the European Commission has signalled openness to reviewing how directives are implemented.
Reform of this kind moves slowly, and reasonable people will differ on the detail. But for a country with Ireland’s housing pressures, and for a city with Galway’s growth trajectory, the direction of this debate over the next twelve months is worth watching closely.
What It Means for Buyers, Sellers, and Developers in Galway
For anyone active in the Galway property market, the practical implications are worth stating plainly.
For buyers, the structural undersupply that defines the current market is unlikely to resolve quickly. Reform, even if agreed, takes years to translate into completed homes. Well-priced, energy-efficient properties in good locations will remain competitive, and waiting for a significant supply-driven softening in prices is not a strategy the evidence currently supports.
For sellers, the same supply constraints underpin values. Realistic pricing and professional presentation continue to attract strong interest, particularly from first-time buyers and relocating professionals for whom the shortage is most acute.
For developers and landowners, the message is more nuanced. Sites that are consistent with adopted plans, serviced, and free of strategic environmental questions carry a premium precisely because they avoid the delays described above. If plan-level assessment reforms advance at European and national level, land that currently sits in regulatory limbo may become deliverable, and positioning ahead of that shift is worth considering now.
The Longer View
Europe once built quickly, at scale, and with pride, and it protected its landscapes while doing so. The Progress Ireland report is ultimately an optimistic document, because it argues that today’s slowdown is the product of fixable rules rather than lost capability. For Galway, a city with proven demand, zoned land, an expanding economy, and a young population, few places in Europe stand to gain more from that fix.
The property market rewards those who understand the forces shaping supply before they show up in the price register. This is one of those forces, and it is moving.
Johnny Gannon is founder of Fair Deal Property Auctioneers and Estate Agents, Galway. For advice on buying and selling property in Galway, call 091 394593 or visit www.fairdealproperty.ie