Over €1.1bn was spent by corporate investors on multi-unit residential schemes in 2018 – accounting for 29.6% of last year’s total property investment. This is according to a new report by international property consultants Savills Ireland.
Development has led to increased focus on Dublin – 81% of all units purchased (2,273 dwellings) were in the capital. Corporate investors accounted for 11% of all residential units bought in Dublin in 2018 (and 8.1% bought since 2012).
Nearly five times more units were block-purchased in 2018 compared with 2017, with 2,923 units bought. Dublin has always been the focus of investor interest, but increased development activity has led to an even greater concentration on the capital.
Dr. John McCartney, Director of Research at Savills said that there continues to be very strong investor appetite for residential assets in Dublin, driven by market fundamentals. Looking ahead, McCartney said new residential supply is now coming on-stream but the residential market is likely to remain under-supplied until at least 2022, and this should ensure continued investor appetite for well-located residential investments.
Savills’ report notes that an increased number of residential investment deals are now happening before the units are built. The majority are entering forward-purchase arrangements with developers to buy rental blocks once they are completed.
Dr. John McCartney, Director of Research at Savills said, "Rising house prices and tight mortgage lending have driven a big shift from owner-occupation to private renting. The number of households renting in Dublin rose by 10.8% last year, and nearly 27% of all households are now in the private rented sector. This has led to strong rents and negligible vacancy – factors which are obviously attractive to investors."