LAND values have fallen by up to 75 per cent and in some provincial towns they are down by up to 90 per cent compared to the peak in 2006, according to a review of the development land sector by Savills.

The sites market has been the sector worst affected by the economic downturn and the credit crunch, says the report. There is virtually no funding available for development land and when coupled with the oversupply of completed homes, falling values and weak occupier demand, the potential to develop new sites is “very limited”.

What little demand there is is largely confined to small, well-located residential infill sites in Dublin. Sales are taking longer to complete (from nine to 12 months) and in many cases are being conducted off market by private treaty.

Joan Henry, head of research at Savills, says that the market value of small sites and serviced plots was likely to recover more quickly than for bulk land. These sites would have detailed planning permission and would not involve major infrastructure requirements.

Savills also predicted the emergence of licence agreements under which landowners would allow developers to build houses on an ad hoc basis.