Surge in Housebuilding Fueled by Development Levy Waiver
There has been a notable surge in housebuilding activity during the first quarter of this year, attributed largely to a waiver on development levies set to expire soon. Introduced by the Department of Housing last April, this one-year waiver on levies payable to local councils for new residential developments, alongside a refund scheme for water connection charges by Uisce Eireann, has incentivized builders.
Under this initiative, builders are exempt from paying local authority development contributions for residential projects commenced between April 25 last year and April 24 this year, provided they are completed by December 31, 2025. The aim is to expedite the construction of new homes, with the Government estimating an average cost reduction of €12,500 per home due to the waiver and water connection charge refund.
Analysts at Goodbody report a significant surge in activity, with commencements up by 67% year on year, including a staggering 107% increase in apartment building. This uptick, totaling 12,297 units in Q1 alone, surpasses expectations and government targets.
Attributing this surge to the impending expiration of the temporary waiver, Dermot O’Leary, chief economist at Goodbody, suggests the Government should consider extending it. Newly elected Taoiseach Simon Harris has hinted at such a possibility.
Property advisor Savills Ireland echoes this sentiment, advocating for at least another year of the waiver. Their analysis reveals an additional 8,878 residential units commenced between March 2023 and February 2024 compared to the preceding year, underscoring the necessity of the waiver in sustaining housing development momentum.
Andrew Sherry, director of development consultancy at Savills, stresses the urgency of extending the waiver to maintain project viability and encourage the delivery of more homes. This sentiment aligns with the overarching goal of addressing the housing crisis while ensuring continued progress.
Goodbody’s data highlights the greater Dublin area as a focal point, representing 59% of all new housing commencements in Q1. Notably, 68% of Dublin commencements were apartments, signaling a diverse approach to addressing housing needs. Additionally, the south west region saw the most significant percentage growth, up 140% year on year, reflecting broader positive trends across the country.
