Corporate investors in €1.1bn housing spend

More than 11% of residential accommodation sold in Dublin last year was acquired by corporate investors, who spent more than €1bn on such property, according to estate agent Savills Ireland.

The company said corporate investors block-purchased 2,923 residential units in the capital in 2018, representing a fivefold increase on 2017 levels.

In total, more than €1.1bn was spent by such investors on Dublin-based residential units last year, compared to €113m in 2017.

Savills said market conditions are keeping investor appetite in the Dublin residential homes market at “very strong” levels.

“Rising house prices and tight mortgage lending have driven a big shift from owner-occupation to private renting,” said John McCartney, director of research at Savills Ireland.

“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,” he said.

Savills also said that while new residential supply is coming on-stream, the housing market is likely to remain under-supplied until “at least 2022”.

This, it said, should ensure continued investor appetite for well-located residential investments.

Savills Ireland’s director of investments Fergus O’Farrell said the increased activity of institutional investors in the Dublin market has been beneficial as it is “helping to accelerate the much-needed supply of accommodation.”

The latest edition of Ulster Bank’s monthly construction index shows that while building activity — led by housing and commercial projects — continued to grow in March, the month showed a notable slowdown in growth.

Ulster Bank chief economist Simon Barry said this was largely due to the month being compared to February when a very rapid rate of growth was recorded. Mr Barry noted that job growth in the building sector equalled a nine-month high in March.

However, company sentiment wobbled, with Brexit uncertainties weighing on construction outlook.

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