Homes approved for planning permission down 23% in second quarter

There was an annual drop of more than 23 per cent in the number of homes approved for planning permission in the second quarter, according to new data from the Central Statistics Office.

The number of “dwelling units” approved in the three-month period stands at 8,723 compared with 11,374 in the same quarter of last year. The annual fall came in marked contrast to the first quarter when an increase of 38 per cent was recorded.

For the six-month period from January to June, there was an overall increase of 3 per cent in the total number of dwelling units approved when compared with the same period in 2022.

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Apartments accounted for 58 per cent of all dwelling units approved, while housing units made up the remaining 42 per cent. This was the first time since the second quarter of 2022 when more apartments than houses were granted planning permission.

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The number of houses granted planning permission fell by 18 per cent on an annual basis to 3,702 housing units, while apartment approvals were down by 27 per cent to 5,021 units.

There was an annual decrease of more than 36 per cent in the number of one-off houses receiving planning permission in the second quarter, compared with an annual decline of 32 per cent in the first quarter.

An annual fall of 6 per cent in multidevelopment houses receiving planning permission in the second quarter compared with an annual increase of 81 per cent in the first.

Across the four local authorities of Dublin, planning permission was granted for 3,351 apartments in the second quarter, accounting for two-thirds of all apartments granted planning permission in the State between April and June of this year.

More than one in five (21 per cent) of all dwelling units granted planning permission in the State in the second quarter were in the Dún Laoghaire-Rathdown County Council local authority area, comprising 1,747 apartment units and 93 houses.

Ian Lawlor, managing director of Lotus Investment Group, a Dublin-based non-bank lender that provides finance for land acquisition and development of medium to large-scale residential projects, said the figures show the housing sector is “stuck in planning limbo”.

“Ireland’s housing development sector is stuck in planning limbo and unless we find a way to put more shovel-ready sites in the market, our lack of supply will continue to stunt housing growth and add to the housing crisis,” he said.

“The positives are that Government schemes like the first home and shared equity schemes are enabling affordability for first-time buyers due to the reduced cash portion needed to purchase a home. So, demand and affordability are there.

“There is also institutional capital available to developers to build the homes needed. However, most of our developer clients would claim they are at below 50 per cent of their annual housebuilding output due to this shortage of shovel-ready sites.

“The problem is planning, planning, planning and within this, the problem is a legislative one. The new planning act, launched in March was aimed at addressing the delays in the planning system but we have yet to see any real evidence of this.”

First-time buyers

Mr Lawlor said the increasing cost of building homes is being passed on to first-time buyers.

“What we are left with is a shortage of shovel-ready sites, meaning builders, starved of sites, are bidding the site prices up, driving site prices up, impacting viability, increasing risk, and negatively impacting delivery,” he said.

“The cost of which is carried by the first-time buyer — that’s if they can even find a home to purchase.

“Legislators need to take a closer look at what is holding up permissions being granted and ask themselves if the rights of the thousands without homes, living with parents etc, are less than the rights of the far fewer number of planning objectors.”