What Next for the Dublin Office Vacancy Rate? A Framework to Examine Short-run Scenarios

Gerard Kennedy and Cillian O'Gorman
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Gerard Kennedy: Central Bank of Ireland
Cillian O'Gorman: Central Bank of Ireland

No 9/SI/25, Central Bank Staff Insights from Central Bank of Ireland

Abstract: Notwithstanding some recent signs of stabilisation, Dublin's office market has been amongst the hardest hit across Europe in terms of decrease in capital values, fall-off in investment and the rise in vacancy rates since the start of the decade. The extent of the slowdown, however, has not been as sharp as in some large US cities. Using an enhanced methodological framework to project short-run vacancy rates, the central scenario for the Dublin office vacancy rate is a marginal rise to just over 19 per cent in 2026 before falling back below end of 2024 levels (18.6 per cent) by the end of 2027. A scenario based on a more benign set of assumptions suggests that the Dublin office vacancy rate may have already peaked, while the more adverse case sees a return to levels last seen around the time of the Irish property market collapse in 2009. In contrast to the 2009 episode, any further significant increase in office vacancy would occur against a markedly different CRE landscape, where current risks are much less concentrated within the domestic financial system.

Date: 2025-11
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