Just 8,000 houses will be built across the entire country this year, compared with the peak of 93,000 in 2006, with Dublin now likely to face a housing shortage in a matter of months, new figures suggest.
Housing builds are so low that almost two-thirds of the houses built are now "made to order" rather than as part of a housing estate or apartment block.
New figures from the Construction Industry Federation (CIF), obtained by the Sunday Independent, show that between 7,500 and 8,000 houses will be finished this year -- a drop of more than 25 per cent on last year.
As shown in figures for the first three months of this year, 1,931 new housing units were built between January and March, compared with 2,766 new units during the same period in 2011.
But in worse news, the number of houses started in the first three months of 2012 has plummeted by 42 per cent, from 1,401 to just 800.
The figures show that almost two-thirds, 61 per cent, of all completions between January and March were "individual housing units generally built to order rather than scheme units or apartments".
"The latest statistics reveal that the level of new house building activity remains severely depressed, which points to a further sharp decline in output for 2012," CIF director Hubert Fitzpatrick told the Sunday Independent.
The figures reveal that 23 of the 26 counties had less than 50 individual house starts in the first three months, with only six official starts in Leitrim.
Carlow, Longford and Roscommon all had just 10 house starts, while Co Wicklow had just 15 starts.
"Output of 7,500 to 8,000 units would be significantly below the estimated sustainable demand for new housing.
"Taking into account demographics and the rate of new household formation, CIF estimates that the sustainable demand for new homes will be 25,000 units annually," Mr Fitzpatrick said.
The CIF is again predicting that the greater Dublin area, which saw just 277 housing completions during 2011, is facing into a shortfall of housing in a matter of months, with another bubble likely in some areas.
"Given the depressed state of new construction activity in the new homes sector, it is anticipated that we are not far away from seeing a shortfall of new housing units, particularly in the greater Dublin area," Mr Fitzpatrick added.
The dire warning from the CIF comes as lending to households for mortgages and consumer spending fell again in April, dropping by nearly four per cent, or €632m, compared with a year earlier.
Latest Central Bank figures show that this follows a decline of 3.9 per cent for the year ending March 2012.
The Central Bank said developments in April were largely driven by a decrease in loans for consumption purposes of €394m.
Loans for house purchase and other purposes also decreased by €188m and €51m respectively.