Late 2024 turnover pick up in Ireland's sluggish development land market

That said, the volume of transactions remains low, with the improvement in turnover reflecting a number of very large transactions.

These transactions include the €152m sale of the former Jury’s Hotel site at Landsdowne Place (to the US government for its new embassy), which closed early in the year, and marked the largest transaction of 2024, to date.

The second-largest deal was the off-market sale of lands at Fassaroe, Bray: 230 acres by the Cosgrave Property Group for an estimated €80m to Cairn Homes.

A further 70 acres was purchased by Cairn Homes in Donabate for in excess of €50m.

In Cork, the largest transaction was the sale of Feltrim, on the Blackrock Road, which consisted of a large, detached home on three acres. It sold for €6m.

 Another notable sale was the 0.5-acre brownfield ‘Coliseum’ building/site at the corner of Brian Boru/MacCurtain St for €5.5m.

Another significant residential site — consisting of 27.5 acres — that sold during the year was at Woodtown, Ballycullen to Lagan Homes for €16m, with the potential to deliver 341 units under the new compact growth guidelines.

Just outside of the GDA area, a largescale greenfield site at Mount Avenue, in Dundalk, and extending to 99 acres, with the majority zoned for new residential, was sold for in excess of €12m.

Government agencies, local authorities, and approved housing bodies are taking a more prominent role in the development-land market and many developers are pre-agreeing deals with AHBs for a substantial number of units in a scheme, before commencing construction.

Despite the improvements during the year, the market remains hindered by various factors, including continued delays in the planning system and viability issues, particularly for apartment developments

Government interventions, such as rental caps, further exacerbate this viability.

This has led to increased uncertainty in the market over potential future policy changes, particularly in the run-up to Budget 2025 and because of the election of an as yet unformed, incoming government.

Although borrowing costs have declined this year, and construction-cost inflation has eased significantly, they both remain elevated.

Another factor that is impeding the market is the lack of adequate infrastructure to support large-scale residential developments. Water, and the lack of, has the potential to limit development in key areas.

Looking forward, addressing the shortages in the residential market will, undoubtedly, be a key priority of the incoming government.

However, uncertainty over how this will be achieved and potential policy changes are likely to persist in the short term.

That said, the demand for zoned land is expected to remain strong and, although viability remains an issue, the urgent need for residential development means that alternative solutions will be required.

In addition, the implementation of the residential zoned land tax (RZLT) in early 2025 may help free up unused land for development, but land-value sharing could have implications on viability for developers.

David McCarthy MSCSI MRICS is a Divisional Director with Sherry FitzGerald Commercial.