With an estimated 10,000 empty apartments in the Dublin area, builders are opting to rent them out rather than try to sell them, says Fiona Tyrrell

The former gasholder at Ringsend is one of a number of newly built apartment buildings in Dublin that is lying empty as developers adopt a wait-and-see approach in the ailing new homes market.

It is estimated that there are more than 10,000 empty units in the Dublin area. The vast majority of these are new apartments which have either failed to sell or have not been put on the market.

The most notable example is the Alliance Building, the nine-storey cylindrical apartment block built inside the metal struts of the Victorian gasholder at the Gasworks scheme in Ringsend, Dublin 4.

The landmark structure forms part of a 7.8-acre site bought by developer Liam Carroll from Bord Gáis in the mid 1990s. Six hundred apartments were built here, along with the office complex now occupied by Google. A further 200 apartments were built in the former gasholder.

The first 50 apartments were launched in June 2006 with prices ranging from €675,000 to just over €1 million. However, it is not clear how many of these were sold. The entire scheme has now been withdrawn from the market, according to the selling agent Hooke & MacDonald.

Rumours are circulating among residents at the Gasworks that those who did buy apartments at the gasholder were given their deposits back by the developer. There has even been speculation that the unusual building may be turned into a hotel.

Carroll is one of a growing number of developers who have extra stock on their hands at the moment. In some cases developers are holding off launching entire schemes until conditions improve rather than risk a failed sales launch.

Others are opting to retain the stock themselves and rent them out, taking advantage of the high rents being achieved in the city. Developers are either renting out the last few units in schemes that have failed to sell or in some cases entire schemes that have never been launched.

O'Malley Home and Developments has opted to hold onto around half of its luxury Lansdowne Woods apartment scheme located on Lansdowne Road in Dublin 4 beside the Dart station.

The up-market scheme, which comprises 54 apartments in two blocks, has never been put on the market. A spokesman for O'Malley says that the firm plans to retain the front block for itself, bar a number of units that were pre-sold.

Finishing touches are being put to the 28 units in the second block and this will be brought to the market early in the New Year, he said.

Interestingly, a lavish 325sq m (3,500sq ft) penthouse in the front block has been rented as a corporate let for a healthy €6,500 a month.

Elsewhere, Cosgrave Developments has opted to hold onto an entire 260-unit scheme - Lansdowne Gate - in Drimnagh off the Long Mile Road close to Drimnagh Castle.

The homes come fully furnished and rents start at €1,400 for two-bedroom units with car-parking.

Construction in Dublin has come to a veritable standstill as builders respond to the changed environment.

The larger developers can afford to hold the line and wait for pent-up demand rather than panic and cut prices, according to one source.

Developers who have stock in prime areas will be most reluctant to sell in a poor market and even in the good times many builders held onto stock in locations such as Dublin 4, according to another source.

"In the past developers who have held onto property in Dublin 4 were well rewarded," he said.

Meanwhile, Dermot O'Leary, economist from Goodbody Stockbrokers, says that stock levels of unsold homes in Ireland "has risen steadily".

There are now 42,000 second-hand homes for sale - equivalent to a 12-month supply of housing stock, he says. Some regions are more affected than others, according to O'Leary.

One in 15 properties is on the market in both counties Cavan and Roscommon, he said.

Dublin comes in at the very bottom of the list with only one in a 100 properties for sale in the capital at present.

This indicates that builders in Dublin, reacting to the number of unsold properties, have moved to cut off supply in the capital sooner than the rest of the country, he said.

The effects of the slow down are being felt in a range of off-shoot businesses.

TurnKey, a company that started as a fit-out and renovation service for investors four years ago, has changed tack and is now offering to stage, spruce up and even garden revamps to vendors, who are becoming increasingly frustrated with the length of time it's taking to sell.

In the last three or four months the company has been getting more and more enquiries from people selling their homes and less and less requests from investors looking for fit-outs, says Clare Holman of TurnKey.

The company offers a full service, including interior and garden design consultation, staging, furniture hire and repairs.