The current shortage of new apartments in the Dublin inner city is set to worsen over the coming year. A new study by agents Hooke & MacDonald has found that only 1,200 residential units were built between the Royal and the Grand canals in 1999 - 65 per cent fewer than the 2,700 homes completed in the previous 12 months.

Development activity is set to fall again this year when only 900 new apartments are expected to come on the market.

Ken MacDonald, managing director of the agency, says the fall off in development is a "a severe blow" to the housing market in terms of supply and rising prices.

He blames the slowdown on "a hostile planning environment at local and national level" and says the city is facing a housing crisis unless radical measures are introduced and a pro-development ethos is adopted at all levels. Mr MacDonald is critical of An Bord Pleanala "for a succession of major planning refusals for new apartments".

In recent months, the board has overruled decisions by Dublin Corporation granting planning for more than 800 units in high-rise developments at George's Quay and Barrow Street. A scheme of 114 units opposite the Point Depot has also been refused planning.