Plans were launched for the development of a town centre in Cherrywood in South Dublin earlier this week. The new development promises to deliver around 4,000 housing units in time. However, new figures from the Society of Chartered Surveyors today indicate that planning permission was granted for only 13 residential schemes of more than 25 housing units in the Dublin area in the third quarter of the year. This comes at a time when housing demand has never been stronger. According to figures from Co-operative Housing Ireland, over a third of tenants experienced a rent increase in the last year. Tenants in the capital saw their rates go up by 6.5% on average.
Michael Cleary, a member of the SCSI's Planning & Development professional group, said we could be looking at between 1,200 to 1,300 units being delivered in those developments. He pointed out that planning was the very first stage and that it could take several years to deliver the end product. "The number of permissions coming through is a guide to where commencements would eventually happen. They could take up to three years to deliver. In the greater Dublin area, we had approximately 2,700 to 3,000 commencements this year. That's a long way off the 7,000 that we need to meet demand," he said.
Mr Cleary said there were a number of reasons as to why developers were reluctant to build at the moment. "Property development is capital intensive, low margin and is a risky business," he said. "Developers are reticent about lodging applications pending the new development plan standards coming in the next Dublin City Council Development Plan, together with fears over purchasers in market who would buy units. And there are issues over accessing capital in the market," he explained. Mr Cleary said the development plan standards, which are due to come in next year, will allow for greater densities and housing and apartment types that are location appropriate. "So, for example, in the docklands, we might see more studio apartments," he concluded.
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MORNING BRIEFS - ECB President Mario Draghi is expected to announce a number of policy easing measures today to try to stoke inflation in the euro zone and keep the euro down against its major peers. A cut to the ECB's overnight deposit rate is expected, but of more interest will be what the bank does with its bond buying programme, or QE. At the moment, the ECB is purchasing €60 billion of bonds per month up to a maximum of €1.1 trillion. That monthly cap might be nudged up slightly and they might extend the programme from its current deadline of September 2016.
*** Moving in the opposite direction is the US Federal Reserve. Fed chair Janet Yellen hinted strongly at an impending rate increase last night when she said that the US economy had recovered substantially from the crash and was set for further growth and firmer inflation. The Fed gathers for its December meeting in two weeks time. A rate hike would see the dollar gain in momentum; and with the ECB expected to ease policy, we could be looking at euro-dollar parity in the coming weeks.
*** Half of SMEs are still finding it difficult to access finance, according to a survey of 600 small companies here. The survey was commissioned by a new group called Independent Finance Providers of Ireland which is being officially launched today. The group is hoping to raise awareness of alternative sources of finance for businesses.
*** The services sector recorded its strongest rate of growth in nearly ten years in November. Investec's Purchasing Managers Index recorded a particularly strong performance in the Transport & Leisure sectors. Staffing levels at service providers are continuing to increase.
