A sharp rise in the level of “uncommenced” planning permissions for apartments, particularly in Dublin, has been linked to speculative activity and land hoarding in the State’s housing market.
A report by the Department of Public Expenditure on planning permissions and housing supply highlights “a growing gap” between the number of apartment permissions and completions.
It noted that while the number of apartments completed annually has gradually increased – from 2,258 in 2018 to 5,107 in 2021 – the number of apartment permissions has risen more sharply, from just under 10,000 units in 2018 to more than 25,000 units in 2021.
At the end of last year, there were over 42,000 apartment units with planning permission that had yet to start in Dublin alone, the report stated.
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The report linked the growing gap between apartment completions and permissions to speculative behaviour.
“Increasing uncommenced permitted units could indicate the speculative purchasing and holding of land with a view to greater future resale value,” it said.
“Acquiring planning permission on land that is held as an asset could add value to the land by reducing risks or delays associated with the planning process by developers,” it said.
Dublin, where high rents generate strong returns for investors, has seen a boom in apartment building over the past number of years.
The department’s report, which is based on almost 35,000 planning applications for residential developments to local authorities between 2012 and 2021 (there were 55,000 in total), is one of the most comprehensive assessments of the planning system here.
It examined planning refusal rates, the timing of planning decisions and the number of those decisions that were appealed while highlighting the potential factors that could delay or prevent commencement once planning is obtained.
With the exception of a drop in 2020, the number of applications submitted each year has been increasing. Nationally the refusal rate was 15 per cent but it noted counties in the Greater Dublin Area and those containing large urban centres, tended to have higher refusal rates.
Kildare had the highest refusal rate (37 per cent) followed by South Dublin (32.5 per cent), Dún Laoghaire-Rathdown (30.9 per cent), Dublin city (24.9 per cent), Fingal (23.8 per cent), Wicklow (23 per cent) and Cork county (21.2 per cent).
Those with the lowest refusal rates were Tipperary (4.4 per cent), Leitrim (4.7 per cent) and Cavan (5.8 per cent). Refusal rates were higher for multi-unit developments (19 per cent) compared with single-unit developments (12 per cent).
While local authorities have a baseline statutory objective to decide planning applications in eight weeks, the average decision time was 14.1 weeks, the report found. Some 32 per cent of applications had a decision time that exceeded 16 weeks while 13 per cent of applications had a decision time that exceeded 26 weeks.
The report found that 7.1 per cent of all applications were appealed to An Bord Pleanála while the appeal rate was higher for multi-unit developments (13 per cent) compared with single-unit developments (3 per cent).
Some 45 per cent of appeals were refused, 44 per cent were granted, while the remaining 11 per cent had other outcomes, such as being withdrawn. The average appeal decision time was 20 weeks.
Developers and builders have long cited planning delays and the high level of appeals as an impediment to development here.
Minister for Housing Darragh O’Brien is planning one of the biggest shake-ups of the planning system in decades in a bid to accelerate the delivery of new homes.
Under the proposed legislation, residents’ associations would be barred from taking High Court actions against planning decisions while local authorities will be afforded greater powers to make compulsory purchase orders.
