Housing permits soar 47% but questions remain over supply

the number of housing units that received planning permissions between October and the end of December rose to over 11,180, compared with the almost 7,600 units in the same period a year earlier

The CSO figures show that most of the new planning permissions in the quarter were for apartments. Picture: PA

Official figures showing a sharp 47% rise in the number of planning permissions in the final three months of the year will bolster hopes more homes will be built this year, but questions remain about future home targets amid the severe housing crisis, a leading expert has said. 

The Central Statistics Office (CSO) said the number of housing units that received planning permissions between October and the end of December rose to just over 11,180, compared with the almost 7,600 units approved in the same period a year earlier.

However, at 6,150, the figures also show that most of the planning permits were linked to new apartments, and a further 1,200 successful applications were for one-off houses. 

Experts have long said that the Irish housing market needs new supply of all types of new housing, following multiple years when too few homes were built to meet the demands of a growing population and an increasingly wealthy economy. 

The crisis of homelessness, surging rents, and soaring house prices for first-time buyers has also entailed costly taxpayer supports and incentives for private landlords and the payment of public grants to home buyers under a variety of direct and indirect schemes.   

The dysfunctional housing market that has failed to build new homes despite soaring prices had been made worse by the Government all but abandoning for many years until recent years building social or public housing in any sufficient quantities. 

The banking crash of over a decade ago made maters worse when many small and medium-sized home builders went bust or withdrew from the market because they could no longer raise finance.    

At 33,000, the number of new housing units built last year is only catching up levels before the pandemic, which means that the targets for annual home construction under Government plans have to be repeatedly raised. The Central Bank projects completions to rise, but not dramatically, to 35,000 units this year. 

Apartments accounted for a significant slice of all new homes delivered last year, although questions remain whether they can be the answer to housing shortages because they are expensive to build and are sold at prices that are out of the reach of many first-time buyers.  

The CSO figures for planning permissions are scrutinised for signs of any strengthening, or otherwise, in the pipeline of new home building.

Goodbody chief economist Dermot O'Leary nonetheless said that the latest data was encouraging. "The relationship between permissions and completions is not perfect, given that there are many other issues such as funding, services and viability to consider. However, this suggests that the pipeline of housing points to further growth over the coming period," Mr O'Leary said in a commentary.  

He said the rebound in permissions for the whole of 2023 was also heartening "given the numerous logistical, legal and policy issues that caused the 21% fall in residential planning permissions in 2022". The CSO figures show that 41,225 permissions were granted for the full year, up almost 21% from 2022.