The dramatic decline over the last number of years in the number of planning permissions granted can be viewed as another barometer of how far the construction industry has fallen. Figure 1 charts the total number of planning permissions granted each quarter from quarter 1 2002 to quarter 4 2010.
It can be clearly seen that from 2002 up until the height of the construction bubble in mid 2007 the number of planning permissions granted increased dramatically from just over 10,000 in Q1 2002 to over 17,000 in Q3 of 2007. This dramatic increase in granted permissions derives directly from the property bubble which took hold in Ireland post 2001. Easy access to credit, a desire to get on the property ladder and a miss guided belief that house prices could only go up drove the demand for new houses to excess. Attempting to capitalise on high prices and satisfy the ever increasing demand for property, record numbers of planning applications and approvals were made.
However, from Q3 2007 onwards the dramatic fall in the granting of planning permissions symbolises the bursting of the property bubble and the subsequent collapse in the demand for new properties. From Q1 2002 to Q3 2007 planning permission approvals increased by 70%. But it only took from Q3 2007 until Q3 2008 for the number of granted permissions to fall from their highest point back to 2002 levels. Even given this dramatic decrease, the decline failed to bottom out and by 2009 the number of granted planning permissions had fallen to half of the number granted in 2002.
This downward trend shows little sign of abating, with figures indicating that the number of granted planning permissions in 2010 was 37% less than those granted in 2009. These figures highlight how far Ireland’s property sector has fallen from the heady heights of 2007. They also show the detachment from reality which was prevalent during the property bubble where unsustainable levels of property development were undertaken.
However, from Q3 2007 onwards the dramatic fall in the granting of planning permissions symbolises the bursting of the property bubble and the subsequent collapse in the demand for new properties. From Q1 2002 to Q3 2007 planning permission approvals increased by 70%. But it only took from Q3 2007 until Q3 2008 for the number of granted permissions to fall from their highest point back to 2002 levels. Even given this dramatic decrease, the decline failed to bottom out and by 2009 the number of granted planning permissions had fallen to half of the number granted in 2002.
This downward trend shows little sign of abating, with figures indicating that the number of granted planning permissions in 2010 was 37% less than those granted in 2009. These figures highlight how far Ireland’s property sector has fallen from the heady heights of 2007. They also show the detachment from reality which was prevalent during the property bubble where unsustainable levels of property development were undertaken.
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