A new report by Goodybody Stockbrokers has found that a surge in planning permissions for apartments was behind a 42% year on year (yoy) in increase in residential permissions in Ireland in the second quarter of the year.
The number of apartment units given planning permission in the second quarter amounted to 4,675, up 156% on the same period last year, and takes the total for the year to date to 7,267. To put this into context, only 2,745 apartments have been completed in total over the last twelve months.
The surge comes on the back of a change building height standards at the end of 2018 and amid very significant interest from the Build-to-Rent sector.
In contrast, the number of houses granted planning permission was flat in the second quarter and is down 8% on the first half of the year. This trend is being led by housing schemes, where permissions fell by 13% yoy in the first half of the year. As Goodbody Stockbrokers have noted previously, housing sales have slowed relative to completions in recent quarters.
In a bid to first clear existing stock, the building industry has slowed their building plans; this triggered the reduction to Goodbody's housebuilding forecast in both 2019 and 2020
earlier this year.
According to Goodbody Stockbrokers, "Planning permissions are one guide of future potential supply, but it is not a good short-term predictor. While there are real signs of life in the Build-to-Rent sector, viability remains a challenge in the sector. It remains to be seen, therefore, what proportion of the surge in planning permissions gets translated into actual build in the short-term."