The number of residential commencement notices lodged in Ireland in 2021 was above that of the pre-pandemic levels of 2019.

Deloitte Ireland’s Real Estate Planning & Development Statistics report shows that commencement notices were lodged on 24,30o units in 2021, in residential schemes comprising more than 20 units.

The report says that c.5,000-6,000 units are commenced annually under this threshold, and so estimates an adjusted figure of 30,300 total unit commencements on residential schemes in 2021.

This represents a 40% increase on 2020, when there was a total of 21,690 commencements and a 16% increase on 2019, when there was a total of 26,240 commencements.

Following the publication of the report, John Doddy, Deloitte Real Estate Sector Lead said: "The increase in commencements between 2020 and 2021 is not surprising given the impact of lockdowns on 2020 levels; however, the increase on 2019 levels is noteworthy, and welcome, given that lockdowns and cost increases have resulted in Ireland’s housing stock availability being at its lowest point in recent history."

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The average time for planning permission to be granted was 187.5 for the year, with Q1 representing the longest wait time with 208 days, falling to 190 in Q2, with Q3 & Q4 were 172 days and 180 days respectively.

Mr Doddy added, "Although the time taken for grants of planning permission has been an issue for developers since the beginning of the COVID-19 pandemic, Q3 and Q4 2021 represent an improvement on the first half of the year.

"Unfortunately, for many Strategic Housing Developments this timeframe has been a minimum due to a huge increase in the number of Judicial Reviews nationwide."

Housing units heavily outweighs apartments according to the mix of residential unit types commenced in 2021, of the 24,304 units (in schemes of 20+ units) that were commenced in 2021, housing made up 15,715 (65%), with apartments making up 6,691 (28%).

A further 1,898 units (8%) are unclassified in planning documents, with the majority assumed to be apartments within mixed-use schemes.

In terms of regional spread, Dublin represented 54% of residential units for which planning applications were submitted in 2021, 57% of units for which planning permission was granted and 41% of units for which commencement notices were lodged.

Cork made up 10% of units for which planning applications were submitted, 6% of units for which planning applications were granted and 11% of units that were commenced in 2021.

The rest of Ireland made up 36% of units for which planning applications were submitted, 37% of units for which planning applications were granted and 48% of units that were commenced.

In the commercial market, Dublin remained the location of choice for office developments in 2021, with permission granted on 22 schemes, compared to 10 in the rest of Ireland.

While the number of commercial planning applications lodged in Dublin remained steady throughout 2021, there was a noticeable increase in applications lodged in the rest of Ireland in the second half of the year, particularly outside of the main cities. Of the 25 commercial applications lodged in Ireland in 2021, 11 were in Dublin, 2 in Cork, and the remaining 12 were outside these cities.

The commercial sector had a strong finish to 2021, with 40% of all office transactions from 2021 taking place in Q4. "This is partly due to sites being completed in Q4 that had been delayed due to COVID-19 closures," said Doddy.

In the retail sector, community shopping centres and retail parks performed stronger than high-street stores in 2021, with Deloitte predicting that this will continue in 2022.

"A key challenge for the high street is that the strength of the covenants and lease terms have changed significantly," said Doddy. "We’ve seen a change in the types of leases available in high-street retail, with tenant-friendly terms such as short-term deals, increased rent-free incentives and more regular break options."

In the industrial and logistics sector, the report notes a 20% reduction in available space for new buildings in or near Cork, Dublin, Limerick and Galway. 

In the hospitality sector, there is a disparity in occupancy rates between Dublin and regional hotels – regional hotels saw 52% occupancy for the year, with occupancy at 38% among hotels in Dublin (compared to 31% in 2020).

Doddy concluded: "Many industry participants hope that recent inflation in costs will be temporary and somewhat tempered during 2022, as production and demand become more balanced. This would be good news, but inflation remains a problem for those traders working on fixed-price contracts that may have been priced 12 or 18 months ago, and it also creates a challenge for developers seeking to agree prices for new projects.

"The government’s Housing for All Plan has set a target of 24,600 new homes in 2022 and, given the level of completions in the two previous, hampered years – 20,433 in 2021 and 20,526 in 2020 as per recent CSO data – there is cause for optimism. The pipeline of schemes that have been granted planning permission is also looking healthier. Overall, 2021 – albeit a year challenged by COVID-19 restrictions and supply issues – showed signs of positivity and recovery."

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