Sunday 25 February 2018

House building hit by lack of land bank sales

Hines is planning thousands of homes at Cherrywood in south Dublin
Hines is planning thousands of homes at Cherrywood in south Dublin
Peter Flanagan

Peter Flanagan

The rate of commercial land sales need to dramatically increase if badly needed homes are to be built around Dublin, according to CBRE.

In the firm's latest assessment of the development land market, the broker said the while the number of land sales has been climbing year-on-year since the market crash in 2009, activity in the first quarter fo this year was notably low.

The firm said that while this was due in part to a number of sales not closing before the end of the quarter, there was a real shortage of large land bakes zoned for residential development.

"There is a severe scarcity of large residential zoned sites being offered for sale in the Dublin market at present, which is not helping efforts to generate much-needed housing supply," the agents said.

According to Wesley Rothwell, who heads the development land division at CBRE in Dublin, commented: "Only 17 development land transactions totalling less than €72m closed in the first quarter of 2015 although a number of transactions have since signed which will boost Q2 spend considerably.

"There continues to be a dearth of residential zoned sites being offered for sale in the Dublin market, with a particular shortage of large lot sizes.

"Demand remains strong with purchasers increasingly considering a range of potential end uses other than offices and residential, including student housing and hotel projects.

"Without an increase in the volume of land being offered for sale, however, it will prove difficult for developers to find sites to accommodate the volume of development needed to improve supply. 12 of the 17 sites that traded in Q1 2015 extended to less than 10 acres in size," he added.

The lack of major land sales implies there is little hope of a surge in house building in the near future.

There is no shortage of land around Dublin that is zoned for residential development, but very few planning applications have been submitted so far.

Developers sought planning permission for little more than 2,300 new homes in Dublin during the first three months of the year, even as the housing shortage becomes ever more acute.

US investment firm Hines are preparing to build nearly 4,000 homes in Cherrywood in south Dublin but that is practically the only "giant" housing development planned for Dublin.

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