Covid measures in place for Property Industry

It is quite telling that the Construction Industry Federation is preparing its members for a gradual or staggered return to a changed workplace.

Minister for Planning Eoghan Murphy made an order on March 29th extending all periods and timelines specified in the Planning Act by 23 days until April 20th, which is a welcome move and eliminates the need for project owners to apply for extensions to deal with delays caused by Covid-19 restrictions. According to the Irish Times this week, the Department of Housing is preparing to issue a series of directives to local authorities across Ireland to automatically extend the duration of existing planning permissions that are due to expire during the coronavirus pandemic. It is worth taking time this bank holiday weekend to read through the recently-introduced section 251A of the Planning Act 2000 to get a full understanding of the planning provisions contained in the Emergency Measures in the Public Interest (Covid-19) Act introduced by the Government last week and due to expire on November 9th.

These are important measures and many more are needed to support the construction industry, which has effectively imploded over the past four weeks. Ulster Bank’s construction purchasing managers’ index (PMI), published earlier this week, showed that construction fell sharply in March, hitting its lowest level since 2009.

Significantly, the Society of Chartered Surveyors Ireland (SCSI) has warned that major building projects could take up to two years to get up and running after the Covid crisis “unless the Government learns lessons from the last financial crash”. The Society acknowledges that as this pandemic is unprecedented in recent history, and the situation is still unfolding, the extent of the industry slowdown is uncertain, which makes the recovery or resumption of business difficult to predict. This overall uncertainty is stalling decision-making, which is causing immediate delays across the commercial sector. In reports such as these, the SCSI would generally share their members’ pricing forecasts for the next six months, but not on this occasion.

Finally, it is worth noting that columnist Paul McNeive maintains that commercial property businesses are best placed to survive this pandemic: “The crisis has had a far greater and more immediate impact on the residential business, where margins are much lower than in commercial property. Commercial markets take a longer-term view, and firms always have the traditional safety net of income from the management departments, valuations and advisory work…”

From our perspective, it certainly appears that Irish firms are much more resilient than they were back in 2008/9. While a gradual approach of ‘back to business’ is expected once restrictions are lifted, this will be because of new health and safety protocols that will need to be implemented. Unlike the drip recovery we witnessed over the past decade, it is more likely that firms will be using this time to prepare for a charge out the gate … once that gate is opened.

In the meantime, hopefully this sunny spell will continue and enjoy your Easter break.

Ian Lawlor
086 3625482

Director / Business Development
Lotus Investment Group