New figures from commercial property specialists CBRE Ireland show that the first quarter of the year saw just under €50m worth of land sales in Ireland.
CBRE said this low level of sales was as a result of the lagged impact of higher interest rates and subsequent viability challenges.
Those sales that did complete were almost exclusively (90%) for sites with residential development potential, it added.
The commercial property experts said that while the State was involved in the largest land acquisitions in the market last year and continues to be active in 2024, several larger and smaller private Irish developers also acquired sites in the first three months of the year.
CBRE said the sale of some notable large-scale landbanks suitable for residential development are currently in the process of closing or have just been launched to the market.
Recently launched sale processes include a 0.23-acre site at Appian Way in Dublin 4 and "Bakers Yard" in Dun Laoghaire in Co Dublin.
It added that conversations with developers this year indicate that there has been a rebound in the level of demand for sites, particularly for those with residential planning permission in place.
It noted that the large-scale Irish homebuilders are moving forward with more intent, particularly where there is the opportunity for strategic partnerships with the State in the form of the Land Development Agency or financing through the Home Building Finance Agency.
"Legislative changes, planning risk and viability challenges continue to be highlighted as impediments to development in Ireland, but national residential commencements have been exceptionally strong in the opening quarter of the year (11,956 units), following the highest annual level of national new dwelling completions since prior to the Global Financial Crisis, in 2023 (32,626 units)," CBRE said today.
Colin Richardson, director of research at CBRE Ireland, there are a number of catalysts that should support an improvement in sales in the second half of this year.
He said that ECB base interest rates are expected to start to fall from June 6, while residential property prices are back on an upward trajectory nationally, and construction costs are largely stabilising.
"Add to this, the impending first payment date for the Residential Zoned Land Tax (the first payment date for property that is liable is on February 1 next year), while valuations are also closer to stable levels in some commercial sectors, including industrial & logistics and hotels," Mr Richardson said.
He said these are all factors that could stimulate an increase in intent from both sellers and buyers in the rest of the year.
