The Irish Property Market and Recent Yield Trends

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New studies have been conducted about the recent yield trends in Dublin. This study observed seventeen leading PRS transactions across the Dublin marketplace. The new build forward sale apartments projects with 100 units sold between quarter 3 of 2016 and the end of 2020 show that yields have remained steady throughout these years.  The yields for these transactions are around 3.75 percent, and other locations are facing a downturn as market maturity continues.

Studies have also shown almost 2 billion Euros worth of investment sales, which relates to over 4000 apartments. The average apartment price in Dublin is just under 500,000 Euros, which is very expensive. Regardless of the price of living, apartment sales in urban areas has increased exponentially. Continuing, all of the seventeen transactions included in the study were single location investments and did not include two large portfolio transactions that occurred in 2020. The two large portfolio transactions equaled around 285 million Euros.

The main city of Dublin, and areas south of Dublin have secured the lowest yields in the Irish market. Where a large number of initial transactions occurred, there was a premium for projects overlooking water or close to canals. Other projects have being gravitated toward as well, this includes property located near the Irish train line. Due to market conditions, a number of north and west city transactions have been brought forward. It is good that these new trends are happening in the property market because it leads to positive outlooks for investors.

Yields and pricing are very location specific and usually depend the assumptions made around rental levels. It has also been perceived that in emerging locations with large developments where there has been an opportunity to bring another phase to the market, has led to yields contracting. Big investment businesses have been sales agents for over 50 percent of the previously listed transactions. As a result of this, they have combined with the companies’ new homes experience and the management of their portfolios. This consists of over 2000 properties in the Dublin area, and they have helped consumers understand the market.

The investors for this sector need to have knowledge of successful development, rental and management strategies, and other investment requirements. Irish patrons should keep an eye on new trends in the coming years and attempt to do what is best for their financial security. 2021 will be a strange year with the pandemic weaning down, but it is interesting to see how the market will react to the new changes.

Written by John Spurrier, Mortgage analyst for Online Application