Apartment completions this year will be half the number finished in 2023
Further signs of a sharp fall in new apartment supply in Dublin this year and next year are spelled out in a new report from estate agents JLL.
Apartment completions in the capital will fall 55pc this year to 4,029. The 9,047 units completed in 2023 is unlikely to be matched anytime soon.
However, supply of new apartments in Dublin will increase to an average of 6,119 units per annum from 2025 to 2028, according to Niall Gargan, head of research at JLL.
The research, entitled ‘Dublin Living Market Report 2024’, attributes the coming recovery to the temporary waiver under which the Government exempts housing developments from having to make development contributions for provision of services such as water supply and roads. That will start to feed into supply from 2027.
Following the waiver’s success in encouraging housing starts, the Government extended the deadline from April this year to December 31, 2024, for commencement of construction work.
That waiver resulted in a notable increase in the number of commencement notices for units, including houses, which were lodged to begin construction work.
From January to May this year, 11,909 new homes commenced construction in Dublin, up 139pc on the five-year average for the same period. In addition, 40,300 apartments in Dublin were granted planning permission.
“Should these permissions become activated, the market will have more robust completion numbers from 2027 onwards,” Mr Gargan added.
However, not alone will such increased supply not meet demand, but there will also be development challenges.
Interest rates are above recent longterm norms, there is a shortage of suitable construction workers and the costs of building materials remains elevated compared with before the pandemic, although that is showing signs of abating.
“While progress is being made on supply of suitable apartment developments within Dublin, it will take a number of years before output begins to meet demand,” he says.
“As a result of this shortage, investors/developers are turning to forward funding, joint ventures and direct development to access stock, but planning and infrastructure provision will play a vital role in facilitating growth.”
Mr Gargan also warns that challenges for operational and investment elements include uncertainty surrounding construction and financing costs which will flow through to investor activity. He expects deal-making will remain relatively slow.
In the first half of this year, only three multi-unit residential investments changed hands worth a combined €117m. The largest of these saw Orange Capital Partners pay more than €65m for 137 apartments at Jameson Orchard, Malahide.
‘From January to May, 11,909 new homes commenced in Dublin’