Planning permissions for new homes fell 41% year-on-year in the third quarter, indicating that the construction sector continues to cool despite efforts to alleviate the housing crisis.

Figures from the Central Statistics Office (CSO) show planning permission was given for 6,742 units in Q3, with housing units accounting for 65% and apartments the remaining 35%.

The decline was driven by a 67% drop in the number of apartments approved during the period, down from 7,027 to 2,347, while there was just a 0.1% drop in the number homes approved for construction (4,401 to 4,396).

For the first nine months of 2022, some 13,615 homes were granted planning permission, up 19.7% from 11,376 in the first three quarters of 2021, while the number of apartments fell 28.6% from 18,165 to -28.6%.

Overall, the number of new dwellings approved through the first three quarters fell 10% year-on-year, from 29,541 to 26,580.

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"Planning permission was granted for 1,407 apartments in Dublin in Q3 2022, accounting for 60% of all apartments granted planning approval in the state," said Shane O'Sullivan, statistician in the business statistics division at the CSO.

"During the same period, the West Region (Galway City, Galway, Mayo, and Roscommon) recorded the lowest number of planning permissions approved at 17.

"Of the 6,743 planning permissions granted for all developments in Q3 2022, 1,930 were for new construction dwellings, 1,814 for other new constructions, 1,922 for extensions, and 1,077 permissions were for alterations and conversions."

The CSO's wholesale price index shows the price of construction materials rose by an average of 16.6% year-on-year in September, impacted by the fallout in Ukraine, and the knock-on effects for cost of energy and raw materials.

The ESRI reported on Friday that house prices, which currently average close to €300,000 nationwide, could drop 12% if an additional 10,000 homes per year or an 35,000 per annum are built.

The number of new homes completed has barely topped 20,000 over the past two years as the construction industry has dealt with restrictions and closures as a result of the pandemic.

The government's Housing for All plan has a target of 33,000 new units being built every year until 2030.

(Pic: Getty Images)