Published February 2021
The multi-family/private rented sector market weathered 2020 with considerable resilience. Internationally, multi-family is now recognised as a mainstream investment category, a long term and stable asset class, with low vacancy and voids.
Institutional investors have been instrumental in enabling and funding the construction of nearly 5,500 new apartments and houses in Dublin since 2016. Also, 10% of each new scheme is being delivered as Part V social units; both of these factors have helped boost supply, particularly in the rental market. The majority of these properties would not have been built without institutional funding/forward purchase.
Multi-Family / PRS transactions are marginally up in Q1 2020 compared to the same quarter 2019; apartment completions are still at a low level, albeit showing some minor increases. In the present environment the importance of the Multi-Family / PRS as an asset class is underpinned.
This is a review of elements of the apartment development market in Ireland over the last 40 years with particular emphasis on the trends and factors influencing development, or lack there-of, over the last 10 years. The report focuses on private development and the role investors have played in housing supply in the State in the past.
Private Rented Sector transactions have continued to dominate the Irish property investment market, accounting for 55% of all property investment transactions in Dublin in the third quarter of 2019, the same percentage as in the second quarter, followed by 37% for offices. Eight of the ten largest Dublin property investment transactions in the third quarter were PRS investment sales. However, there is still a significant shortage of new apartments under construction.
Private Rented Sector transactions accounted for a record 55% of all property investment transactions in Dublin in the second quarter of 2019, followed by 29% for offices. Four of the five largest Dublin property investment transactions in that period were PRS investment sales. However, there is still a significant shortage of new apartments under construction.
There were only 1,766 apartments built in Dublin in 2018, 54% of them (956) in Dublin City Council area, 33% (575) in Dun Laoghaire-Rathdown, 12% (207) in Fingal and just 2% (28) in the South Dublin County Council area. It is estimated that there will be just 3,000 apartments built in Dublin in 2019 but this is still less than a third of the estimated 9,000 units required annually in the capital for the sale and rental markets.