Government to probe housing projects stalled due to land speculation
The Government has commissioned an investigation into developments stalled due to land speculation after it was revealed that 43,000 housing units with planning permission in Dublin had yet to begin construction at the end of 2022.
A report by an external consultant on behalf of the Department of Housing is to form part of that probe.
It found that, of the 77,918 units in 506 separate developments that had in-date planning permissions in the capital at the end of last year, just 9,000 had been completed, 43,000 had not begun construction, and 26,000 were mid-build.
The Construction Industry Federation (CIF) has previously told the that land speculation or hoarding of planning permission is a practice developers have “no interest” in.
The 43,000 units that had not begun construction by the end of last year in Dublin accounted for roughly half of the estimated 90,000 unactivated planning permissions for units in the country.
The high number has increased calls for the Government to impose "use it or lose it" laws on developers.
Such laws would see permissions lapse if sites are not built on within a certain time frame. They have been strongly resisted by the industry in recent years, and labelled by the CIF as “a simplified notion”.
Last month, Housing Minister Darragh O'Brien announced that local authority and water connection levies will be waived on all developments that commence in the next 12 months in a bid to urgently increase housing supply.
Mr O'Brien said scrapping these fees on a temporary basis would cut an average of €12,500 off the cost of constructing a home.
"From the research that we've done, and very detailed research in that regard — if you take even within our cities — we've 80,000 to 90,000 unactivated planning permissions.
"A large portion of that is indeed cost. We would earnestly want as well some of these cost savings to be passed on to the home purchaser," Mr O'Brien said at the time.
The report finds the level of uncommenced developments has jumped from 39,000 to 43,000 in just 12 months, while five-year approvals for 24 developments comprising 1,300 dwellings in Dublin are set to expire this year.
It shows more than a quarter of the uncommenced developments had been subjected to judicial review in the courts.
The report also finds that apartment developments were nearly seven times less likely to have commenced construction compared with housing developments in Dublin, while apartment commencements were at their highest within the confines of South Dublin County Council, and were at their lowest on the territory of the Fingal and Dún Laoghaire-Rathdown local authorities.
A separate report on the operation of Home Building Finance Ireland, prepared for the Department of Finance, has found that lenders may not have the risk appetite to fund build-to-sell apartments because the demand for people to buy such homes is “unproven”.
It said “funding gaps remain” in terms of meeting the expected housing demand at this time, as lenders “may not yet have the capacity or risk appetite to provide the overall levels of funding required”.
