Rise in permits lifts hope for new housing supply

An increase in the number of planning permits has given some hope that the lack of supply in the new housing will ease in time.

Alan McQuaid, chief economist at Merrion Capital, said the increase in permits “was a good sign” but that there was still a long way to go before the permit numbers would translate into the construction of a sufficient amount of housing to seriously ease shortages.

The CSO headline figures published yesterday reveal huge percentage increases in the number of permits in the three months to the end of June from a year earlier, but the numbers reflect the start of the recovery from the small number of applications for housing permissions until recently.

The number of planning permissions granted for houses in the second quarter surged almost 77% in the year to 2,637, while permissions for apartments more than doubled to 373 units.

The CSO said over a quarter of all permissions for dwelling units were for one-off housing.

Planning permissions granted for housing totalled 6,626 units in 2014, up from the 6,002 in the previous year, but still sharply lower from the 9,098 units in 2011.

“It’s positive for supply,” said Mr McQuaid, who predicts there will be a pick up in the number of construction starts in the second half of the year.

He said the permissions would hopefully boost supply and help deliver in time more affordable homes.

The pace of house price inflation has eased in recent quarters, but that the cost of renting has continued to climb.

House price inflation will ease through the remaining months of the year and leave prices 9.5% higher in 2015 from last year, Mr McQuaid predicts.

Green Party leader Eamon Ryan said yesterday that lands owned by government agencies and semi-state firms such as Dublin Bus and RTÉ, and Nama’s “deserted” Irish Glass Bottle site, could boost the supply of new housing in the capital.

“The Government has just raised a 15-year bond at 1.8% interest rate,” said Mr Ryan.

“There is no reason why we should not be able to commit future rental income from student and social rents to be able to raise a similar long term bond to pay for these developments.”


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