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.

The number of residential planning applications submitted during the period Q1 2021 has reduced by one relative to Q1 2020; in terms of units, however, it is down by 29%.

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.”

Residential market

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.

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 a further unclassified 66 units of mixed development (approx. 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.

“It is evident the strong requirement for housing has not disappeared due to the current Covid-19 crisis, with significant pent-up demand for both rental and sales accommodation. However, affordability remains an underlying issue. Coupled with this pent-up demand and the evident slowdown in supply, this is likely to continue for the foreseeable future.”

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 4 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 (6 lodgements) and Q1 2021 (5 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 office schemes which were granted planning in Q1 2021, took an average 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 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.”