‘Large decline’ in planning permissions for new homes amid costs squeeze

House approvals on the rise but 66 per cent decline in planning permissions for apartments this year, says CSO

Evidence is mounting that the residential construction sector has cooled off in recent months with Central Statistics Office (CSO) data published on Friday revealing a sharp decline in the number of new apartments to receive planning permission.

The figures indicate that 26,850 dwelling units – both apartments and houses – had received planning permission in the first nine months of the year. This represents a 10 per cent decline from the same period last year when more than 29,500 units received permission.

Of the total, 13,615 were houses, an increase of almost 20 per cent on the first nine months of last year. However, the number of apartments receiving planning permission tumbled by close to 29 per cent, from 18,165 in the nine months to the end of September 2021 to 12,965.

Friday’s figures also reveal that just 6,743 units received permission in the third quarter of 2022, a decline of more than 41 per cent from the same period in 2021.


Of that 6,743, 2,347 of the units approved were apartments, a “large decline” of 66 per cent from the third quarter of last year, when 7,027 received permission from planning authorities, the CSO said.

Dublin accounted for the majority of apartment approvals with the four local authorities within the capital greenlighting 1,407 new units – more than 59 per cent of the national total – over the three-month period. The capital has been experiencing an apartment building boom on the back of a surge in institutional investment.

The counties of Mayo, Roscommon, and Leitrim, meanwhile, did not grant any planning permissions for apartments during the quarter.

Planning permissions offer an imperfect guide to future building activity as many permissions never translate into homes.

However, the approval rate had been expected to decline in the back half of the year amid mounting funding and costs challenges.

The CSO’s wholesale price index for September showed the price of construction materials had risen by an average of 16.6 per cent annually to the end of month. Supplies of key inputs squeezed by continent-wide, post-pandemic demand and also the war in Ukraine, which has dramatically increased energy and raw materials prices.

Last week, the agency released figures revealing 2.7 per cent drop-off in construction activity as a whole in the third quarter of the year as the price of energy and other key components surged. The decline was greatest in the residential sector, with house-building falling by 16.2 per cent.

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times