Increases in planning applications and project commencements drives growth in residential construction sector – National Housing Construction Index

The National Housing Construction Index compiled and issued by Link2Plans has shown that growth in the residential sector remains strong, with increases in both the number of new planning applications and project commencements continuing the upward trend for the first eight months of 2014. When compared to the first eight months of 2013, nationally project commencements are up +40% while the number of new planning applications are up +12%.

The data contained in the National Housing Construction Index is aggregated by consultancy Link2Plans from real time planning and project information in every local authority area.

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Strong gains for project commencements
The recovery in the Irish residential construction sector continues to gather momentum, with planning applications and project commencements both recording significant gains in the first eight months of 2014. The triple figure growth in the number of project commencements recorded in the first four months of this year has been replaced with more sustainable but still extremely significant gains.

According to Danny O’Shea Managing Director of Link2Plans, “The +40% year on year increase in project commencements is still an extremely strong result and is good news for the residential construction sector. At Link2Plans, we commented at the time that there were certain factors at play which had resulted in project commencements being up +132% for the first four months of 2014. In particular, the 1st March deadline before which projects had to be started to avoid being subjected to the new Building Regulations. Those projects have now worked their way through the planning system and what we are seeing now is a more accurate picture of the recovery in the residential construction sector.”

The largest year on year gains across the country for project commencements took place in Monaghan (+115%), Cork (+79%), Westmeath (+63%), Donegal (+63%) and Sligo (+60%). For the first time in 2014, three counties saw the number of project commencements fall with Longford (-20%), Roscommon (-3%) and Leitrim (-3%) all showing a decrease when compared to the same period in 2013.

Danny O’Shea Managing Director of Link2Plans said that “overall the number of project commencements rose by 1,418 from 3,510 to 4,928 when compared with the same period in 2013. While the latest edition of the National Housing Construction Index saw three counties record a decrease in the number of project commencements for the first time in 2014, when compared to the same period in 2013, this amounted to nine less project commencements in total for the three counties.”

Planning applications continue to rise
For the third consecutive edition of the National Housing Construction Index, the number of new planning applications across the country were up, with the first eight months of 2014 showing an increase of +12% when compared to the same period in 2013. Dublin was once again the best performing county with a year on year gain of +35%.

Danny O’Shea Managing Director of Link2Plans said “sentiment in the residential construction sector remains very positive with the number of planning applications for the first eight months of the year increasing by 986 from 7,668 to 8,954, representing an increase of 12% nationally year on year. This positive sentiment is being felt across the country. 18 counties recorded a rise in the number of planning applications when compared to the same period in 2013; the highest number of counties with an increase in planning applications since the start of the year.”

“The +35% increase in planning applications for Dublin was followed by some large increases in planning applications for Meath (+32%), Wicklow (+31%), Kerry (+26%), Clare (+19%) and Cavan (+16%) with the largest falls in planning applications occurring in Leitrim (-28%), Donegal (-20%), Laois (-9%), Longford (-8%), Tipperary (-5%) and Louth (-4%).” continued Danny O’Shea Managing Director of Link2Plans.

Number of Residential Developments quadruples in three years

Project commencements can be divided into three categories including residential developments (multiple unit developments), one-off housing (self-build projects) and one-off housing extensions (self build extensions).

Since Link2Plans began analysing the number and types of project commencements in 2011, the number of residential developments has grown significantly. In 2011, over half of all project commencements were self build extensions (50.35%), with multiple unit developments making up just 1.67% of the total amount of project commencements, while the remainder were self build projects (47.99%).
When compared to the first eight months of 2014, the number of multiple unit developments has risen from 1.95% to 5.95%, while self build extensions have fallen from 50.35% to 44.24%. The number of one off self build projects has grown slightly from 47.99% to 49.82%.

Danny O’Shea Managing Director of Link2Plans said that “With the dramatic increase in the number of multiple unit developments, what we are seeing is the predicted upturn in the Irish residential construction sector. In 2011, there were 70 multiple unit developments, which equated to 1.95% of the total number of project commencements in Ireland. Now, in just the first eight months of 2014, the number of multiple unit developments has more than quadrupled to 290, of which 127 are located in Dublin. Multiple unit developments now make up over 5.95% of the total number of project commencements, while the number of self build extensions has remained stagnant and as result now only makes up 44.24% of the total number of project commencements.”

The National Housing Construction Index is produced by a team of researchers at Link2Plans and it relates to all Planning Applications and Project Commencements throughout the months of January to August 2014 and gives a direct comparison with the same period in 2011, 2012 and 2013.

Link2Plans have produced this index bi-monthly and it has been the most accurate barometer of real time sentiment (planning applications) and actual residential construction activity (project commencements) including residential developments (multi units), one-off housing (self-build) and one-off housing extensions.

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