The most recent Hooke & MacDonald residential investment report indicates that investor appetite remains robust with demand for opportunities in the sector now spreading from Dublin and its suburbs to the commuter belt counties of Kildare, Meath and Wicklow. The report charts the €7 billion spent by Irish and international investors and funders in the PRS or multifamily market since its emergence as a core investment asset class in Ireland in 2016.
While Dublin was the primary focus for PRS transactions over recent years, surrounding counties are seeing more activity. It’s expected that opportunities for build-to-rent developments in the wider Dublin area and commuter belt will become more prevalent, noting that in most cases this is the only way apartment developments are viable as build-to-sell pricing does not support funding or construction. Therefore, forward sales and purchases are expected to remain the most prevalent form of investment for new projects.
Further afield, Hooke & MacDonald’s view is that Ireland’s regional cities are in desperate need of new rental accommodation, especially apartments, owing to “negligible levels of new construction” that have taken place there in the last 13 years.
“Rental stock availability levels are at historic lows and despite strong demographic and economic indicators, supply has been slow to increase mostly because of viability issues for apartments,” the report states. But while funding for development remains a challenge, they add that the conditions are “coming right” for increased activity in the cities of Cork, Galway and Limerick on suitable sites in well serviced areas, and note that both domestic and international capital are looking at these locations.
The review also hones in on the planning system, saying it is “not fit for purpose”, while noting that the “out-of-control objector free-for-all, and now commonplace judicial reviews, in relation to new residential developments is grossly unfair to those in need of housing.”
The authors add: “Bizarrely it’s not just well-housed members of the public that are objecting to new schemes but also disingenuous politicians who are doing so, putting populism before principle. It’s hypocritical for politicians to criticise the government and developers for shortage of supply and high rental costs and house prices and then to go and contribute to those costs and shortages by objecting to developments or by advocating changes to draft plans that will in turn reduce supply and increase costs.”
LSL News.