Number of planning permissions for new homes drops sharply

The number of planning permissions for new homes fell sharply last year amid concern the Government’s key housing targets could be missed in the coming years.

Central Statistics Office (CSO) data show the total number of dwelling units granted planning in 2022 fell by 20.5 per cent to 34,177 units, down from 42,991 in 2021.

While the number of houses granted planning permission in 2022 rose by 4.4 per cent to 17,454, apartment permissions fell by 36 per cent to 16,723 units.

In the final quarter of last year, which coincided with the steepest interest rate hikes by the European Central Bank, planning permissions contracted by 44 per cent to 7,597 units compared with 13,450 units in the same quarter in the previous year.

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During the three-month period, planning permissions for apartments fell by 54 per cent while permissions for houses declined by 28 per cent.

Most of the apartment projects in Dublin and elsewhere in recent years have been funded by institutions, which have up until recently been able to borrow at very low interest rates.

While housing starts remain strong, the latest planning permissions data presents a worrying signal for the Government and its ambitious Housing for All strategy, which envisages 33,000 new homes being built a year out to 2030.

Of the total planning permissions granted last year, 51 per cent (17,454) were for houses while 49 per cent (16,723) were for apartments.

Some 65 per cent or 10,803 of the apartments granted planning last year were in the four Dublin local authorities.

Dublin accounted for 75 per cent of all apartments approved during the final three months of the year followed by Kildare 7 per cent and Cork 4.5 per cent.

In terms of house units granted planning permission in the fourth quarter, Waterford had the highest number at 566 units (15 per cent), followed by Dublin with 433 units (11 per cent), and Cork with 385 units (10 per cent).

Of the 3,390 units approved in the final quarter under Strategic Housing Development scheme, 81 per cent were for apartments and 19 per cent were for houses.

The CSO figures indicate there was an annual rise of 14 per cent in the number of multi-development houses receiving planning permission, compared with a decrease of 8 per cent in one-off houses.

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