– Level of residential planning applications granted in Q1 fell by 26% year-on-year

– Level of residential commencement notices lodged in Q1 fell by 44% year-on-year

The number of residential units submitted for planning in the first quarter of 2021 is down by 29% compared to the same period in 2020, according to a report from Deloitte.

Commenting on the report, John Doddy, Deloitte Real Estate Advisory, said: “The reduction in the number of units submitted is most likely a direct implication of the restrictions imposed over the first quarter of 2021. This trend is amplified further down the development timeline, with granted schemes down 26% and commencement notices lodged down 44%.

“The slowdown in residential planning permissions will inevitably have an impact on housing supply at some point in the next few years, compounding the impact from the construction shutdown caused by Covid-19.”

Irish residential market

Despite the restrictions in place for construction, there was relatively strong planning activity nationally over the first quarter of 2021. While the level of residential planning applications submitted in Q1 2021 (77) remained relatively consistent with Q1 2020 (78), the level of applications granted fell by 26% year-on-year. The level of commencement notices lodged fell by 44% year-on-year.

Of the 77 new residential scheme planning applications submitted in Q1 2021, 36% were in Dublin, 36% in the rest of Leinster, with the remaining 28% in the rest of Ireland.

Of the 70 residential schemes granted planning permission in Q1 2021, 50% were in Dublin, 27% in the rest of Leinster, with the remaining 23% in the rest of Ireland.

Of the 32 residential schemes that had commencement notices lodged in Q1 2021, only 12% were in Dublin, down from 42% in Q1 2020. The rest of Leinster accounted for 50%, with the remaining 38% across the rest of Ireland.

Shift to housing development

The mix of unit types subject to commencement in Q1 2021 has seen a substantial shift to housing over apartment development, with 206 apartments units and 1,492 housing units with subject to commencement notices to be delivered across Ireland. This includes an additional unclassified 66 units of mixed development (approximately 40/60 apartment/house mix).

John Doddy said: “The number of units being delivered has been significantly impacted by the Covid-19 pandemic. Firstly, the number of commencements is almost half that of the same period in 2020. At a minimum, there will be a delay in delivery of existing stock as site works have been curtailed and, indeed, ceased entirely for a period of time. It is also likely that many of the schemes that have been granted permission across Q1 2021 may delay development commencement until a level of economic certainty returns, and the risk of further lockdowns is reduced.”

Office market

The focus on office development has been predominantly in Dublin: approximately 66% of schemes in the application process have been applied for, granted, or commenced within Dublin city and county. This represents an increase in the percentage of office development taking place in Dublin city and county, which was approximately 50% for Q1 2020.

The national appetite for office development has halved year-on-year, with only four schemes commencing across Ireland in Q1 2021, compared to 8 in Q1 2020.

Whilst the level of office development applications lodged remained relatively constant between Q1 2020 (Six lodgements) and Q1 2021 (five lodgements), there was a reduction in the number of schemes granted planning permission, with 12 in Q1 2021 compared to 18 in Q1 2020.

With the exception of an isolated example taking over 300 days to be granted planning, the time taken for a decision to be made on office schemes that were granted planning in Q1 2021 was an average of 122 days.

John Doddy said: “Over the past year, there was a marked reduction in demand for new commercial office development, likely driven by the well-documented concerns around the future of the office as a place of work. The reduction in new development during this period will have a knock-on effect on supply over both the short and medium term due to the illiquidity in the delivery of stock to market.

“There remains a focus on Dublin for office development, driven by the inherent demand for this location, the economic benefits and quantum of population in the city. However, there is now a 50% split between Dublin and the rest of Ireland, which is a notable and interesting development shift to more confidence in the regional occupational office market.”

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