Residential applications steady but 'starts' fall

Planning&Development:Developers sat on their planning permissions much more in 2007 while the number of domestic planning applications rose rapidly, writes Edel Morgan.

AGAINST the backdrop of a sluggish housing market, 2007 saw many developers keep their options open by sitting on planning permissions until the market picks up. Meanwhile domestic planning applications for home improvements soared as people resigned themselves to staying put.

While there was no dramatic fall off in planning applications for residential developments this year, the real picture lies in the reduced number of "starts" or commencement notices received by the local authorities for residential developments this year. A commencement notice informs the local authority that a person intends to start work on a development.

Jim Keogan, deputy city planner with Dublin City Council, says that while there's "no indication" of a significant reduction in the number of applications for large residential developments compared to 2006, the level of commencement notices dropped 25 per cent over a nine-month period.

Fingal County Council saw a slight dip in the number of planning applications but "starts" plummeted from January to October by 51 per cent compared to the same period last year.

In south Dublin up to November last year 802 commencements were received which led to 3,296 residential units being built. In the same period in 2007 there were 837 notices leading to 1,047 residential units being built.

Residential schemes of over 100 units accounted for only 2 per cent of the annual total of 3,900 units in south Dublin. Developments of up to 20 units represented 13.85 per cent of the total. Interestingly, the bulk of applications in south Dublin - 77.95 per cent - were for single units.

Tony Shanahan, a planner with South Dublin County Council, says planning applications overall were down almost 5 per cent in his area up to November but says it is not uncommon "for as much as 12-15 per cent of total applications for a given year to be received from late November to the end of the year".

In Dún Laoghaire-Rathdown County Council the picture is less dramatic. While a local authority spokesperson said the level of planning applications was down 8 per cent across the board - apart from domestic applications for extension which are up 11 per cent - commencement notices dropped by 15 per cent.

When the market was buoyant it was not uncommon for builders to have several phases of a development in progress at once - albeit in various stages of progress and depending on whether the planning conditions allowed this. The trend now, for those who do actually go ahead and build, is to finish out and sell a phase before starting the next. Another council official told me that more developers are now building homes in a scheme in "dribs and drabs" to test the waters.

In a year when there has been a fall off in the number of new homes being built, Jim Keogan says there has been a "substantial increase" this year in the number of domestic planning applications. He sees this as a reflection of the market "with people investing in their own property rather than selling and moving".

Domestic planning applications received by the councils are only the tip of the iceberg when it comes to the upsurge in home improvements - as extensions under 40sq m (431sq ft) do not need planning permission. It is estimated that residential repair and maintenance will be worth around €5 billion by the end of 2007.

Keogan believes the €16 billion worth of matured SSIAs are also a factor - over 10 per cent of holders told surveys that they would use all or some of their money to carry out home improvements.

In Dublin City Council the predominant pattern of applications was for smaller infill sites of five to 30 units. "We do have larger schemes but they wouldn't be the predominant form of application," says Keogan.

He says the number of individual houses being built on side and rear gardens has risen significantly as a form of housing development in the city.

"Around 400 individual houses were granted planning permission and this has increased every year for 10 years. These are much sought-after because they tend to be in established suburban locations often in close proximity to the city and, from our point of view, are a good utilisation of land in terms of density.

"If you look outside the city, there would be less applications for individual houses where there are a greater proportion of houses built after the 1970s and gardens are smaller. Fingal or south Dublin wouldn't have as many."

He predicts, given the market situation and subject to the Government's decision on stamp duty in the Budget, that the real impact of the slow market will be shown next year when we could see a decline in planning applications next year.

A spokesperson from Dún-Laoghaire Rathdown County Council also anticipates "a huge drop off" in planning applications next year.