IRISH property trends are moving towards central European models, with a rising openness to rental accommodation and new alternative financing options.
While largely driven by market forces, these are broadly welcome shifts for Irish business and society, says Libby Garvey, head of banking at law firm Eugene F Collins.
“We are seeing more families renting their homes rather than home ownership necessarily being a primary goal for life,” said Libby Garvey. “We all know that Ireland has a traditional culture when it comes to land ownership, but we are seeing societal change.
"We are seeing more co-living, people living in individual apartments and sharing recreational spaces. We are seeing a lot more shared recreational spaces in the private rental sector (PRS). It's more of a central European model, or perhaps like the US, which I think is a welcome change."
The way that people in Ireland are now more open to alternative financing models is an equally important societal change. New entrants to the Irish lending markets will continue to play a vital role in providing access to finance to support construction, innovation and sustainability.
“A lot of these changes were happening pre-Covid, with a lot of developments in banking services and FinTech, with crowdfunding models becoming more popular,” said Ms Garvey. “We will probably see a lot of those changes accelerating post-Covid, which makes sense as online services continue to grow.
“We are also seeing new banking trends in real estate, notably with PRS schemes built to rent, blocks of apartments that are attracting a lot of foreign capital because we have a high rental income in Ireland. That trend will continue.”
Meanwhile, the more dynamic period of new house building that preceded the advent of Covid-19 now looks like it is also bouncing back. Many sites that had closed due to the virus are now restarting building works.
Thus far, these changes and impacts have not impacted hugely on prices. Where once everything revolved around the pillar commercial banks, the new finance models have helped accelerate the pace of societal and business change.
“As a nation, we've adapted very quickly and we'll continue to adapt,” predicts Libby Garvey. “The Central Bank has proven to be very responsive to all these new trends. They've shown great leadership in looking at the evolving markets and addressing the constraints on the finance industries, allowing the banks to free up capital to foster the current environment.”
She also notes that it is key for both borrowers and lenders to fully understand the financial options available. As a law firm, one service provided by Eugene F Collins is effectively to connect the borrowers and lenders, to find a good fit.
“We are, first and foremost, a law firm. We also advise businesses on the critical things to consider when they are, say, looking at financing a development.
“And when we are instructing on a loan, even when the circumstances seem unique, the chances are that we'll have someone in-house who has seen the type of arrangement before. We have a lot of experience with international lending structures. That is the beauty of working with a large law firm.”
Eugene F Collins continues to expand. This week, the firm appointed Ray Byrne as partner in its banking team. The firm says this appointment strengthens its team in what it sees as a crucial sector for economic growth and recovery in the years ahead.
Mark Walsh, managing partner, said: “We have seen the emergence of new banking trends in particular in real estate financing with the entry to the loan markets of new providers of senior and mezzanine debt and the availability of institutional investment capital to support construction activity and significant growth in the build-to-rent market.
“We recognise the need to expand expertise and enhance our ability to collaborate with our broad client base to help navigate these changes. Ray Byrne brings invaluable experience working with domestic and international clients across all areas of finance law. He will complement the firm’s focus and outlook to further grow the banking team and I am proud to welcome him to the partnership.”
Libby Garvey added: “The banking sector in Ireland is evolving at a fast-pace and our team is at the centre of these developments. Ongoing advancements in fintech as well as an increased focus on sustainability are changing the ways that our clients do business.
“As we look towards a post Covid-19 economy, developments arising out of the programme for government such as enhanced stimulus packages for SMES, a recovery fund for infrastructure development, the creation of a carbon-tax-funded Climate Action Fund and the prioritising of green finance strategies will have implications for banks and borrowers alike.”
Ray Byrne specialises in finance transactions across multiple sectors. He advises both borrowers and lenders in relation to acquisition financing, real estate financing, development financing and on a range of products across various fund sectors. He also acts for domestic and international financial institutions on syndicated and bilateral deals and for direct lenders in relation to both senior and mezzanine facilities.
He joined Eugene F Collins as an associate in November 2019, having previously spent five years in the finance department of law firm Arthur Cox in Dublin.
This promotion comes following the appointments of one partner, three associates and three newly qualified solicitors to the firm’s corporate, property, construction and dispute resolution teams earlier in 2020.