The Irish marketplace is diverse with people that have different levels of incomes. All prospective homeowners need a place to live and the money to be able to afford it. It is interesting to look at the facts surround the housing market in Ireland, and its affordability.
The affordable housing locations in Ireland are looking to be very active this year and the years ahead. The positive outlook stems from the local and national governments focus on Irish sectors and its requirements for delivered an increased supply. The affordable housing sector is looking good for multi and single-family investment patrons. Local authorities and AHB’s have been getting ready to increase delivery either through direct build or the acquisition of private stock in the recent years.
Long term lease agreements are a part of the national housing policy and are meant to give many opportunities for private capital to fund the sector by getting pre-leased investments. There are two types of long-term lease agreements, standard and enhanced rents; Both are discounted on the market which ranges between 5 to 20 percent. Many developers in Ireland are negotiating these types of lease currently, and a large number of them are already going through.
In recent analysis, it looks like there is going to be an increasing focus with investors looking at this sector of housing. The net yields are around 4 percent for new stock based on the security for long leases with discounted rates. This pricing has been very attractive for both purchasers and vendors. There has been a large number of sales that involve mixed tenure investments that are related to statutory requirements as well. Other opportunities in sight show that social elements will make up a large percentage of the housing market, specifically when you consider over 100 properties.
The government’s new housing plan is going to see the state take up 30 percent of equity in homes bought by first time buyers. The introduction of a shared equity plan will be in conjunction with the help-to-buy initiative and will assist buyers who are currently locked out of the market. These new plans are set in motion with their sights on first time buyers, and the Irish government is trying to help them secure a home for a good price. It will be interesting to see how these new Irish policies will affect the affordable housing market and its value continuing into 2021 and beyond.
Written by John Spurrier, Mortgage Analyst for Online Application