The Irish market has shown consistent strength and maturity based on low vacancy rates and positive portfolio performance. Other leading causes include the rising population, and the government support of the housing market. New changes in the market have also helped alleviate losses on small investors as well. The increasing allocation of funds is being diverted by long term investors to the residential investment sector, which include pensions, and sovereign wealth investors. This has increased new supply of housing with supporting pricing and yield assumptions being factored in.
The government in Ireland has been very helpful to the housing market, and they have enacted measures to boost supply to the public and private sector. The multifamily rented sector has been recognized as part of the solution to the housing market, but the lack of viability on approved apartment developments has been the cause for the multifamily sector not to reach its full potential.
There is a misconception among people that every site that has planning permission can be developed, and viability needs to be addressed urgently to help the shortage of rentals in urban areas. In addition to this, the multifamily investment market in Dublin has continued to consolidate in the last quarters of 2020. Investor interest and demand for properties has remained very strong in Ireland based on the sectores impact.
Over 2,500 multi family properties were sold in Dublin in 2020, and the total money made was around 1 billion Euros. The largest residential investment transaction of the year was the sale of 368 apartments by Cosgrave Property Group. This is important because this was the largest investment deal of the year, and the largest join investment deal of the year in Dublin across all asset classes. Another off-market transaction was for 317 residential units across North Dublin, which in turn was valued at 145 million Euros.
With all of Dublin’s investment transactions, multi family properties lead the way with 44 percent of all transactions, and the value from these transactions is valued at around 2.4 billion Euros. There were over 3 billion Euros transacted in the Dublin investment market in 2020, which is very positive considering the pandemics effect. It is also worthy to note that PRS transactions in the final six months of 2020 account for over 1 billion.
Multi Family investment has been leading the way for Irish growth. This will hopefully continue to expand on into 2020, with positive outlooks looking even better in the years beyond. These things I spoke on begin to touch the surface on these investments impact for the Irish market, and it will be interesting how things continue to shake out.
Written by John Spurrier, Mortgage Analyst at Online Application