Dublin was perpetually undersupplied during the boom because of high land prices and a tortuous planning process. Builders went out further and further (and were followed by buyers) and now that prices have fallen in the capital, the remaining buyers (of which there are plenty, remember Dublin’s unemployment rate is 7.9% – way below the national rate of 13.2%) want back in. Meanwhile, planning permissions (a good indicator of potential supply) are down sharply to 2,155 (total units!) in the last 4 quarters. This year, so far, there have been over 5,000 residential sales in Dublin and the ESRI think that housing demand in Dublin is around 10-12,000 units per year. Doesn’t take a rocket scientist to figure out what is going to happen here. Property prices in Dublin will continue to be bid up by purchasers who are having trouble finding suitable accommodation.
It won’t be long now before politicians are blaming house builders for ‘hoarding’ land as they are starting to do in the UK. Instead, the planning process should be rapidly reformed to prevent another housing bubble. Bubbles are good for nobody, least of all the construction industry as evidenced by it near nuclear destruction recently.
The population of Dublin, according to the CSO, is presently 1,262,400. With 100,633 on the live register, the unadjusted rate of employment is 7.9%.