Coronavirus: New homes supply will be hit – and affordability too

Efforts to address the ongoing shortage in the supply of new and affordable homes are likely to experience a significant setback as a result of the Covid-19 crisis.

With all construction activity other than the delivery of essential health-related infrastructure currently on hold, a new report from Deloitte suggests the fallout from the pandemic will continue to be felt in the residential property sector even after the threat of coronavirus recedes.

Commenting on the expected impact, John Doddy, real estate lead at Deloitte, said: “The strong requirement for housing has not disappeared due to the current Covid-19 crisis, and, as we emerge from it, the implications could include delayed delivery of units, an impact on affordability as the economy contracts, a delay in the commencement of projects currently in planning and a slowdown in the release of phases in schemes currently under way.”

While Deloitte says it expects to see a significant decrease in the number of residential planning applications in the current quarter, its analysis of nationwide planning statistics for the first three months of this year shows there was a strong level of activity for schemes involving more than 20 units prior to the onset of the current crisis. According to it, there were 57 commencements, 95 planning permissions granted and 78 applications lodged up to March 31st last.

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Backlog

Commenting on the residential statistics, Vincent Sorohan, director of real estate advisory at Deloitte, said it was “critical” that a “fully-functioning planning system” be maintained at this time to ensure that delays to the assessment of current applications are minimised while also avoiding a backlog of applications for assessment later in 2020.

The importance of maintaining the operation of the planning system through the Covid-19 crisis period was further underlined in a separate report by Savills head of planning Raymond Tutty.

We should give planning authorities the tools they need to operate electronically

He complimented planning officials for continuing to handle both applications and appeals; however, Mr Tutty said he believed the planning system is not fully exploiting the electronic tools available to it.

He said: “Today it seems even more unnecessary and burdensome on all involved. The thought of submitting planning application hard copies to practically empty council offices for a staff member to scan and upload the documents online... These finite public resources could be utilised more efficiently, particularly at times of emergency such as this.

“If Covid-19 will remain with us until a vaccine is developed, we need to mitigate its impact and the impact of similar healthcare emergencies. We should give planning authorities the tools they need to operate electronically. The Government has been working on the delivery of an e-planning system since 2016. Once this crisis abates, we simply cannot delay the delivery of a modern e-planning system any further.”