Residential construction activity tops pre-pandemic levels

Residential construction activity exceeded pre-pandemic levels last year, topping more than 30,000 units, according to a report from Deloitte.

Deloitte Ireland’s latest Real Estate Planning & Development Statistics report says commencement notices were lodged on 24,304 units in residential schemes comprising more than 20 units last year.

As approximately 5,000-6,000 units are commenced annually in smaller schemes or standalone units historically, the Big Four accountant said, it arrived at an adjusted figure of 30,304 total residential commencements in 2021.

That represents an increase of 40 per cent on 2020, when there was a total of 21,686 commencements and a 16 per cent increase on the pre-pandemic market in 2019, when work started on 26,237 homes.

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However, it is still below the 35,000 new homes that most experts argue must be built each year to keep up with demand.

John Doddy, Deloitte real estate sector lead, said the increase on 2019 levels was “noteworthy, and welcome, given that lockdowns and cost increases have resulted in Ireland’s housing stock availability being at its lowest point in recent history”.

Planning permission

However, it took an average of 187.5 days – or over six months – to secure planing permission for new developments last year.

“Although the time taken for grants of planning permission has been an issue for developers since the beginning of the Covid-19 pandemic, Q3 and Q4 2021 represent an improvement on the first half of the year,” Mr Doddy said.

“Unfortunately, for many [fast-track] strategic housing developments, this timeframe has been a minimum due to a huge increase in the number of judicial reviews nationwide.”

Of the 24,304 units in schemes of more than 20 homes that were commenced in 2021, houses made up 15,715 (65 per cent), while apartments made up 6,691 (28 per cent). A further 1,898 units (8 per cent) were unclassified in planning documents.

Commencement notices

Dublin represented just over half the residential units for which planning applications were submitted, 57 per cent of units for which planning permission was granted and 41 per cent of units for which commencement notices were lodged.

Cork made up 10 per cent of units for which planning applications were submitted, 6 per cent of units for which planning applications were granted and 11 per cent of units which were commenced in 2021.

The rest of Ireland made up 36 per cent of units for which planning applications were submitted, 37 per cent of units for which planning applications were granted and 48 per cent of units which were commenced.

Dublin remained the location of choice for office developments in 2021, with permission granted on 22 schemes, compared to 10 across the rest of the State.

“The quantum of office space required by occupiers appears to have remained stable,” said Mr Doddy. “However, what has changed is the configuration of these spaces, with much more of a trend towards open plan and a focus on meeting and collaboration spaces.”