Sharp drop in planning permissions for new homes

Architect and housing expert Mel Reynolds said the figures were indicative of the difficulty developers are facing when it comes to building apartments, particularly outside of Dublin and Cork. File photo: iStock

The number of planning permissions granted for new homes has sharply declined, with a motion of no confidence tabled against Housing Minister Darragh O’Brien amid fears the Government’s key housing targets could be missed in the coming years.

Statistics from the Central Statistics Office show a decrease of 41% in the number of new dwellings given planning permission in the third quarter of 2022 compared to the same time last year, with a huge drop of 67% in the number of apartments granted permission.

In the western region covering Galway, Mayo and Roscommon, just 17 apartments received permission between July and September.

The Construction Industry Federation said the drop-off reflects a “growing logjam in the planning system” with units being held up either in judicial review or by An Bord Pleanála.

Its director of housing and planning Conor O’Connell said: “From our own analysis of the number of potential homes held up, we estimate there are at least 31,000 held up in judicial review and in excess of 30,000 in An Bord Pleanála. This is potentially over two years of housing supply delayed.” 

Property Industry Ireland, a wing of Ibec, said it was concerning for the delivery plans of the Government’s Housing for All that planning permissions for apartments have dropped “so significantly”.

Architect and housing expert Mel Reynolds, however, cautioned against reading too much into planning permissions granted, but said the figures were indicative of the difficulty developers are facing when it comes to building apartments, particularly outside of Dublin and Cork.

There are tens of thousands of non-activated planning permissions for homes in Ireland, and it is feared that a variety of factors such as inflation in the construction sector could see a slowdown in home building in the coming years.

“Apartments are very challenging to fund,” he said. “For some the only way to fund them in areas of higher demand is if they’re pre-sold.

I’ve been contacted by builders, who have a contract in their hand for sale to the local authority, and even they can’t get funding. And that’s as risk-free as you can get.

It comes as Solidarity/People Before Profit said it would table a motion of no confidence in the housing minister next Wednesday, in a move described by Government sources as “cynical”.

PBP said that the housing and homelessness crisis is “tearing apart the social fabric of Irish society” and leading to the scapegoating of refugees.

Meanwhile, speaking in Cork, Taoiseach Micheál Martin welcomed the findings of an ESRI report which says house prices could fall by 12% by 2030 if housing output increased by 10,000 units annually.

Mr Martin said increasing supply and building houses faster is the key to solving the housing crisis, adding that a whole range of options will be continue to be pursued by Government in 2023.