Home planning permits leap in quarter but caution over health of housebuilding rebound

The number of planning permissions for houses and apartments in the September quarter jumped 22% to 12,942 from the same quarter in 2019, according to the new CSO figures. Picture: PA

A large increase in the number of planning permissions granted in recent months may show that house building is on some sort of recovery path although experts have warned about the long-lasting damage the Covid-19 crisis will inflict on housing completions. 

The number of planning permissions for houses and apartments in the September quarter jumped 22% to 12,942 from the same quarter in 2019, according to the new CSO figures. 

The figures show that the permissions in the quarter involved more apartments than houses — 7,214 were apartments and 5,728 were houses — received planning approval.

That means, the CSO said, that there was a 27.5% increase in the number of apartment permissions from the 2019 quarter, and a rise of just over 16% in the number of houses getting planning permission.

Analysts in the past have cautioned that planning permissions may not be a reliable guide to the prospects of the troubled house building market.

And economists from the ESRI, the Central Bank, and other leading housing market analysts have warned that the Covid-19 lockdowns will set back house building here for many years to come.

Many analysts have long forecast that only around 20,000 new homes will be completed this year, well short of the 35,000 units they say are required to be built each year for many years to come anywhere near to meeting housing demand.   

Fewer house completions have unwelcome implications for house prices and for rents, should the economy rebound strongly from the Covid-19 economic crisis next year.  

Some economists have warned that the Covid crisis will deepen divisions and, in time, put more pressure on the cost of buying and renting homes. The CSO figures may also not automatically point to a healthier outlook for the housebuilding market. The figures show that one-off housing accounted for a significant share of the planning permits granted in the September quarter 

The CSO said that a year earlier "for the first time, more apartments than houses were granted planning permission, a trend which has continued up to the current quarter". It said: "In the first three quarters of 2020, apartment planning permissions accounted for between 55% and 66% of those granted for total dwelling units."