Apartment demand falls flat: Developments plummet as focus switches to family homes
The housing market may be heating up, but demand for apartments has gone cold, our exclusive analysis reveals.
Exclusive analysis of CSO data reveals that between January and June of this year, just 112 planning permissions for apartment developments were granted - 93% less than the 1,644 approvals for housing during the same period.
In total, 91% fewer single apartment units received planning permission than single housing units in the first half of 2014.
Meanwhile, the number of planning permissions granted for apartments dropped by 74% in the recession years between 2009 and 2013, while housing approvals fell by 68%.
Demand dwindled as the recession saw the population 20-somethings flee Ireland – the main market for apartments.
The number of 15 to 24 year-olds in Ireland fell by 31% during the austerity years, with 160,000 in this age group emigrating between April 2009 and April 2014.
However, the population of 30 to 34 year olds has grown during the same period and now outnumbers 20-somethings by 35%.
Thousands of people in this group bought during the boom years now find themselves crammed into apartments that are no longer fit for purpose as they settle down and have families.
The latest Residential Property Price Index shows that apartment prices rose by 26% in Dublin this year.
John McCartney, Director of Research, Savills. Picture by Shane O'Neill, Copyright Fennell Photography 2013.(Image: Copyright Shane O'Neill, Fennell Photography 2013)
But Director of Research with Savills estate agents John McCartney thinks investors rather than home owners are driving prices up.
Getting rid of the Capital Gains Incentive – which allows developers to buy investment properties without paying capital gains tax for seven years – and increasing demand for family homes means “prolific demand for apartments is going to be qualified going forward”, he said.
Mr McCartney told irishmirror.ie: “There will certainly still be a demand for apartments in natural apartment locations, that is close to the city centre, close to transport hubs, the likes of Dundrum and places like that where you’ve got the Luas.
“But if we build more family housing in Dublin, you’ll start to see an increase in the vacancy rates in those in those further out areas.”
