More apartments than houses were granted planning permission last year for the first time in the history of the State. This comes as property prices continue to defy predictions,with the latest figures showing a rise of 2.6 per cent in the 12 months to January despite the disruption of the pandemic.The annual rate of growth recorded at the start of the year was the fastest in 20 months.
Central Statistics Office (CSO) figures show planning permissions were granted for 26,224 apartments in 2020, an increase of 33.9 per cent on the previous year and the highest number since the CSO series began in 2005. This was also up from fewer than 10,000 in 2018.
The majority (74 per cent) are earmarked for Dublin, where foreign investors have flooded into the capital’s private rented sector (PRS) market to avail of comparatively strong returns.
Estate agent Sherry FitzGerald estimates that PRS investors have invested more than €6.6 billion in the Irish residential market since 2011, €3.7 billion since 2018, and most of it in Dublin.
The CSO said 2020 saw the first annual decrease in the number of houses granted planning permission since 2012. There were 18,314 planning permissions granted for houses, compared with 19,651 in 2019, a decrease of 6.8 per cent.
Overall planning permissions for all dwelling units rose by 13.5 per cent to 44,538.
Planning permissions are an imperfect guide to future building activity as many permissions never translate into homes.
Some are sought just to add value to land or to alter existing provisions. Equally, many building projects fail for financial reasons before the building phase begins.
The current lockdown to curb the coronavirus has resulted in the closure of most building sites. This is expected to curtail the supply of new homes coming on to the market.
The CSO figures show planning permissions were granted for 4,432 houses in the fourth quarter of 2020, a decrease of 9.5 per cent on the same quarter in 2019. Similarly planning permissions for apartments fell 29 per cent to 5,104 when compared with the same quarter in 2019.
Separate CSO data on property prices meanwhile showed that prices in Dublin, which had been declining, rose by 1.1 per cent year on year in January while prices outside Dublin rose by 4 per cent.
At the outset of the pandemic, many had predicted property values would decline sharply but a number of factors – increased savings, remote working, and ex-pats returning from London after Brexit – have driven them forward again.
The latest Residential Property Price index suggested the number of property transactions in January, however, fell by 30 per cent to 3,691 compared with the previous month. The total value of transactions was €1.1 billion.
The figures show households paid a median or middle-range price of €261,000 for a house over the 12-month period to the end of January. The Dublin region had the highest median price at €385,000.
Within Dublin, Dún Laoghaire-Rathdown had the highest median price (€537,842), while south Dublin had the lowest (€353,000). The highest median prices outside Dublin were in Wicklow (€350,000) and Kildare (€320,000), while the lowest price was €110,000 in Leitrim.