 Tender Forecast 2026 (30th January 2026) With building and materials cost inflation forecast of c.3.0% through 2026 and expected labour cost increase (due to Aug ‘26 SEO) in the range 3.2 - 3.5% in the same period, based on these assumptions I expect tender prices (for general building) to increase by up to 3.1% in 2026. This assumes that contractors targets gross margin of 7.1% given the expected level of activity in the market. With the forecast tender increase being in line with the past 2 years it is a good time to progress projects to take advantage of current prices.
The Irish construction sector in 2026 faces a unique situation: there is strong demand for housing and infrastructure, yet housing commencements have fallen by 80% in 2025. Extreme disruptions to supply chains seen in previous years have largely stabilised, new challenges have emerged for developers, contractors, and the public sector. These primarily revolve around rising labour costs and shifting material prices. As we have seen in recent years, and indeed months, in the current global environment things can change very quickly. With such a backdrop the key to success is staying focused and adaptable while looking to fix prices at Q1 rates. Main Drivers of Construction Costs in 2026 A number of major factors are influencing construction budgets this year:
Worker Category & New Minimum Hourly Rate Craftsperson (Bricklayers, Carpenters, etc.) - €23.74 Category A Worker (Skilled Operatives) - €23.03 Category B Worker (General Operatives) - €21.37 Apprentice (Year 4) - €21.37 In addition to hourly wage increases, employer contributions to pension and sick pay schemes are incoming. These additional "soft" labour costs are now a larger portion of total project tenders, particularly in the residential sector. Material Costs: Navigating Stability and the "Green Premium"While global energy prices have eased, resulting in more stable prices for energy-intensive materials such as steel and glass, the market in 2026 will see a divergence in the costs of different building materials. 1. The Concrete Reality Concrete remains a central source of inflation. The ongoing effects of the Concrete Products Levy, originally introduced at 5%, continue to be felt. Since concrete is essential to nearly every Irish building project, even minor cost increases will significantly impact overall project "hard costs." Energy price instability on account of the Middle East conflict will have significant impact on construction costs. 2. The "Green" Shift There is a widening price gap between traditional building materials and their low-carbon alternatives. With stricter building regulations around carbon emissions, demand—and consequently prices—for sustainable timber, high-spec insulation, and carbon-neutral cement have increased. Prices for insulation and glazing remain high due to competition between deep retrofitting and new-build projects. Mechanical and electrical systems, such as heat pumps and advanced ventilation, have seen a 4–6% price increase in 2025, driven by global demand and the need for skilled installation labour, while copper, which touched an all time high at $14,527.50 a metric tonne on 29th January is forecast to remain high and volatile in 2026. Outlook: Resilience Amid High Costs Despite ongoing inflationary pressures, the sector is still resilient. The National Development Plan continues to inject significant funding, and the Society of Chartered Surveyors Ireland (SCSI) reports that, although tender prices are still rising (2.5% in 2025), the pace has become more predictable, with mid-single-digit increases rather than the volatility experienced in 2022 and 2023. For both developers and homeowners, early procurement and the securing of fixed-price contracts are the primary strategies for mitigating the impact of upcoming Q3 wage increases.
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 The new apartment design guidelines were issued by the Government on 8 July, 2025.
There will be a number of potential savings that could be made on existing schemes, however, the savings will vary a lot from scheme to scheme, depending on the unit mix in each scheme. While the changes introduce some flexibility to apartment design, there is still an affordability gap and some financial support will be required to achieve viability prior to committing to a start on site. Our high level financial model looks to illustrate the quantum of savings that may be achieved per unit. Of course, one has to consider the impact on a total development of the new design guidelines and as such the overall mix of apartments will be critical. For example, the number of parking spaces will be closely linked to location and unit mix in addition to the price paid for land having to be apportioned across the total number of units. The VAT paid by a purchaser on an apartment designed to the new standard will still be high ranging from €40k to €66k dependant on unit type - this contributes to affordability issues for purchasers. The high level indicative cost model can be accessed here bit.ly/newapartmentstandardscost. Hope that it is useful and looking forward to getting feedback  The theory behind the recent changes to "Planning Design Standards For Apartments" is relatively simple:
1. Smaller Floor Area = Less Construction Cost 2. Less Dual Aspect and Amenity = Lower Complexity. Improved Efficiency 3. Simplified Planning ("permitted modifications") = Faster Timelines 4. Higher Density = Better Site Efficiency & Lower Per Unit Land Costs The caveat is around will the savings be passed on? The quantum of saving is not clear without detailed cost modelling of full developments, however, high level modelling of a consented 100 unit development gives indicative order of magnitude savings as indicated - these savings may not be quite as high as those noted at the standard's launch. Changing the mix on an owned site may also give additional savings on account of lower per unit land costs and possible improvements in nett:gross ratios - this prospective change is not without additional planning risk and programme impact. These savings will lead to improved affordability with lower household incomes required to purchase units. Removal of VAT would also lead to additional improvements as indicated. It will be critical in implementation to ensure that minimum quality, safety, sustainability and habitability standards are maintained given that small deviations from the new standards could make a small unit unlivable. Planning Permission will still be required. The "permitted modification" (the proposed s44B PDA 2024) only applies to altering an already permitted scheme in line with the new Guidelines. The only 'faster' element, therefore, is that a new substantive permission will not be required in order to effect such alteration. Ensuring that you have the correct project structures and processes in place to facilitate efficient project delivery is critically important to any property development business. In Ireland, the ratio of residential planning activations to completed units is approximately 1:2 in suburban areas and between 1:3 to 4 in urban areas. To achieve the target of 50,000 homes per year, the number of planning applications must double annually. Challenges to delivery includes the grant rate of planning applications, judicial reviews, infrastructure constraints, and financial viability. Developers need to focus on controllable factors to efficiently move a project through planning to site commencement. This paper offers strategies to manage these controllables effectively. With current uncertainty and volatility in the market it's important to review property projects and carry out a sensitivity analysis on a project's overall return by varying the original baseline assumptions. This may be particularly be the case where a project is distressed, being restructured or in advance of being offered for sale. Using as an illustrative example the case of the mixed use Camden Yard project in Dublin a sensitivity analysis should review the impact on return of as broad range of assumptions as possible in order to understand and quantify the risks in a project or ballpark what a site may be worth. |
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Keogh Consulting looks to help individuals and organisations deliver the right projects the right way. Here is some of our knowledge and a few case studies that we hope will help you on your project journey. 
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