Saturday 22 October 2016

Planning applications surge - but not enough to meet demand

Sean Duffy and Paul Melia

Published 14/09/2016 | 02:30

Housing Minister Simon Coveney. Photo: Tom Burke
Housing Minister Simon Coveney. Photo: Tom Burke

despite a desperate housing crisis, planning applications rose by just 1pc in the three months to the end of June.

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The latest figures from the Central Statistics Office (CSO) show that development in Ireland is gathering pace, although the rate of progress remains substantially below the levels required to meet the housing crisis.

The combined CSO figures for houses and apartments show that there was planning permission granted for 3,141 dwellings in the second quarter of this year. That represents an overall rise of just 1pc compared to the 2015 figure.

The Government's Housing Action Plan 'Rebuilding Ireland' has a target to deliver 25,000 new homes every year by 2020.

Housing Minister Simon Coveney said he did not expect the number of units granted permission to "increase overnight", but that actions set out in the housing plan would boost supply.

"I never expected overnight to have a dramatic increase in numbers," he said.

"I think the numbers will increase, and increase dramatically. We're inching forward but it's nothing to write home about."

Planning permission for apartments rose by 69pc in the second quarter compared to the same period in 2015, with 801 new developments approved.

John Shanahan, a member of the Irish Planning Institute, said it was no surprise to see a rise in the number of proposed apartments across the country, adding that the issue of student accommodation was belatedly being addressed. "We are seeing developments being initiated which will address the shortage in student housing," he said.

"There will be a number of purpose-built developments coming into the market in the coming months, so that would explain a part of the rise in apartment approvals."

He added that the number of older people selling the family home to downsize into smaller dwellings was pushing up demand for apartments. Mr Shanahan said that the Government should be more innovative in its approach to addressing the housing shortage.

"For too long, politicians in this country have looked to the UK for guidance when addressing housing issues.

"The reality is there are a number of models and mechanisms that can be adopted, both within the EU and further afield that could help the situation. Ireland needs to looks beyond the pale," he said.

The number of permissions granted for single houses declined by 11pc, however, and Mr Shanahan believes that excessive financial requirements on borrowers were precluding them from entering the market.

"The problem is an indication of a flawed financial process towards single homeowners," he claimed.

"There have been a number of financial misadventures in the housing market since the initial crash in 2008. One of the main ones has been the Central Bank's insistence on getting a down payment of 20pc on new mortgages, which has challenged purchasers at exactly the wrong time. A wiser step would have been to have the 20pc as a guideline and perhaps introduce a more thoughtful appraisal of lending applications from credit institutions.

"A private mortgage insurance market would also have helped to lower the threshold for buyers and could have improved the demand situation." The CSO figures show permission was granted for 78 new commercial buildings and 510 new agriculture buildings, up from 196 in the same period of 2015.

Irish Independent

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